The government today called for specific steps like resolving land availability issues and focussing on high value-added industries to increase the contribution of the manufacturing sector in the country's economy.
The National Manufacturing Policy (NMP) aims at increasing contribution of manufacturing to the national GDP from the current 16% to 25% by 2025, and also creating 100 million jobs in the next decade.
"For the NMP to successfully meet the objective of 25% share for the manufacturing sector in GDP, certain specific measures are required," the Economic Survey 2011-12 tabled in Parliament said today.
It said there is a need to resolve the issue of availability of land for industrial and infrastructure use.
"NIMZs are a key tool for facilitating the growth of manufacturing sector, which cannot take off in the absence of a well-thought-out and standardised approach to land acquisition," it added.
Under NMP, seven National Investment and Manufacturing Zones (NIMZs) with world-class facilities, would be set up in different parts of the country.
Allocation of agricultural land for manufacturing is crucially linked with the issue of agricultural productivity and food security, it said.
"The situation could turn into a win-win one for both manufacturing and agriculture if agriculture productivity increases to levels where both less land and labour were required in this sector for food security," the survey added.
It said there is a need to shift structurally in favour of high value addition industries.
"Specific policy thrust is required in high-precision machinery, pharmaceuticals, biotechnology, shipbuilding, defence production, and the aero-space industry, which are some of the areas that provide scope for diversification," it said.
Domestic demand for these sector are increasing and therefore there is a need to leverage that demand for locating production facilities in the country by bringing in suitable foreign collaborators.
It has also called for strengthening forward and backward linkages of the manufacturing sector for making progress on the objectives laid out in the NMP.
The growth of the services sector depends considerably on the growth of manufacturing, it said, adding that banking, insurance, trade, transport, communication, and skill development are some of the areas where growth will be driven by a competitive and vibrant manufacturing sector.
It added that the employment-generation potential of the manufacturing sector has not been fully harnessed in India.
