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Economic challenges and opportunities UPSC NOTE


  • The new government must redouble its efforts on economic reforms, particularly related to manufacturing

  • India’s continued urbanisation will see hundreds of millions of agriculture workers relocate to cities to find formal employment in the coming decades. 

  • A failure to generate low-skilled employment could push staggering stress on India’s governance structures. 

  • Success in manufacturing will not only help India’s domestic trade and employment goals but also expand resources for national security

  • India has powerful domestic compulsions to improve its manufacturing base. 

  • First, India has a massive employment-creation requirement. 

  • About half of Indian labour remains mired in low-productivity agriculture

  • If India’s attempts to enact major farming reforms are successful, there could be a fast, massive transition of employment out of agriculture. 

  • These workers are ill-suited for India’s highly successful skilled services sector.

  • A second reason behind India’s desire to boost manufacturing is the nation’s goods trade deficit

  • Despite a perception that India is “anti-trade”, India had a little over $1 trillion in goods trade in the last 12 months — and a $250 billion deficit during that period.

  • The Modi government’s early attempts to stoke States into competition with each other have fallen by the wayside. 

  • The rankings of States’ business environments called the “Business Reforms Action Plan (BRAP)”, has not been updated since the COVID-19 pandemic

  • The central government’s plan to help craft model industry laws for States to consider has been underwhelming.

  • Getting more States to focus on thoughtful, transparent industrial policies is a difficult task 

  • The government should also consider putting stronger emphasis on job-creating manufacturing sectors such as textiles, paper mills, and furniture, instead of pushing almost exclusively for investments in capital-intensive sectors such as semiconductors and robotics.

  • India’s national election provided an opportunity to assess and redirect policy

  • But India’s core needs behind the current manufacturing push — jobs, trade, and security — will not change. 

  • The size of the market and current growth rates are quite attractive to investors. 

  • But more work needs to be done, especially at the State level in India, for “Make in India” to further accelerate.



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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Economic challenges and opportunities UPSC NOTE
Economic challenges and opportunities UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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