How the newly elected State Governments accelerate India’s Industrial Scenario?

The recently held Legislative Assembly Elections in Assam, Kerala, Puducherry, Tamil Nadu and West Bengal have witnessed the formation of NDA, LDF, DMK and TMC spurring a new trajectory for change. The economy in India, already ravaged by the onslaughts of the COVID19 pandemic, is confronted again with the second wave leading to partial lockdown and curfews in many states. 

Irrespective of the government’s continuous assurance to improve the economy, little has been done to improve the worst affected sectors: manufacturing, aviation, tourism, MSMEs in total, internal mobility and retail and capital market. COVID19 in 2020 had resulted in horrific job loss, economic contraction, dwindling industrial growth and aggravated lack of social security net. 

The situation is bleak for enterprises and start-up ecosystem to stimulate job growth, competition and innovation. In India, the insurmountable challenges to industrial growth are:

• Unfavourable political factors
• Absence of Infrastructure
• Expanding sick industrial units
• Regional imbalances for industrial development
• The dearth of skilled workforce 

 It is high time that the new and re-elected governments with their distinct political ecosystem spanned across these five states spare resources and draft new policies for industrial development to help labourers from migrating to find work. Reverse migration will fetch better income to trigger innovation in the Hindi heartland and promote skill development among the country’s youth.
 
While the data on economic stagnation does not include the colossal loss in the unorganised sector, analysts opine how the strategy to renovate should require the government to think ahead as we all look back and retrospect on pandemic 2020 lessons. In all the states, the elected leaders face the massive challenge of turning around economic crises and offer better livelihood to their subjects. 

Ease of Doing Business for Enterprises

In an economy battered by pandemic, the government should allow for adequate provisions for start-ups and encouraging the growth of enterprises. Respective states should smooth out the frictions and irregularities in regulatory frameworks that discourage investors from planning industries in India. The state governments should work towards eliminating discrepancies that hinder market access and ease of transaction.  

Utilization of Untapped Rural Workforce 

Government should help industries to plan on sustainability by taking into consideration the physical and social factors. A fresh sequence of initiatives is required to heal the frayed ends of rural industries whose distortion has left thousands in bitter resentment, hunger and poverty. The government should pay heed to the rural disadvantaged sections whose people can steadily contribute to India’s journey of development. 

Over the decades, the gulf between India’s rural and urban citizens has widened displaying unabashedly irregular economic growth and social and physical infrastructure. India’s low-cost, rural labour is a boon to flourish skill-intensive value chain and thrive growth of manufacturing units. A trained workforce will push value chains of manufacturing units to compete on a global pane. 

Skill Development to Facilitate Skilled SME Workforce  

To improve industries, the states equally need to build skill development centres and short-term courses to replenish the industries with a skilled and trained workforce. The skill gap should be bridged to churn profits and output without splurging. In India, the small business enterprises help in building the GDP through trading, exporting and importing and therefore should not be left outside government frameworks.

Handholding of SMEs with Supportive Measures   

Emphasis on farming & agriculture and SMEs, decapitated by private enterprises and lockdowns with a focus on eliminating long-standing challenges is a pre-requisite. This sector expects firm government investments in value chains, helping stakeholders with smooth access to credit and technology and drawing on plausible intervention measures to act resiliently to anticipated environmental tragedies to prevent an overwhelming shock. 

Many stakeholders and owners of SMEs are devoid of knowledge about accessing loans and resources to refurbish the units. One part of the problem is banks reluctant to lend capital to the SMEs owing to their low profitability or high risks in turning profits and the other part is rising borrowing costs.  

IoT and Automation for Competitive Edge

The states should invest in Industry 4.0 and the Internet of Things to enhance infrastructure in manufacturing units besides propelling supply chain management to evolve. While programs like Make in India and Digital India Mission are visionary, the yield can only be achieved through interconnected digitisation and automation through which the manufacturing sectors will nail a competitive edge.

Investment in automation to trumpet growth for SMEs will result in a streamlined operation with better product quality. To realise the dream of automation, the government should facilitate low-cost innovation, turn-key solutions, capital loans, leasing pathways and advisory services. 

Supportive Framework for Businesses

Flexible or regulatory practices favourable to industries and in helping them to resolve insolvency or obtain construction permits should be rolled out. New business models and technology should be allowed in the states to allow reduction of risks, industrial development and employment of skilled workers.