A Quantum Miss

For the hype around India’s manufacturing prowess, its share in overall GDP is nothing to gloat about. Ever since the licence raj was dismantled, the expectation was the economy would prosper on the back of manufacturing. Yet, almost three decades since liberalisation, manufacturing continues to account for just around 16 per cent of GDP.

There are many impediments that hold the country back. Archaic labour laws, difficulties in acquiring large tracts of land for big projects, bureaucratic hurdles, procedural delays, a less-than-efficient dispute resolution mechanism and high power, logistics and capital costs are some of them.

Land, Labour and Logistics

“Reforms are required in the three Ls—labour, land and logistics. We need to take action to produce in a more cost efficient manner,” says D.K. Joshi, Chief Economist, Crisil. “We also need policy certainty to give more assurance to foreign investors. You require good infrastructure to attract investments.”

The scope for improvement is substantial. In 2019, the World Economic Forum, in its annual World Competitiveness Index, ranked India at 68, down