Panjab should look at creation of a New Ecosystem to revitalise manufacturing sector

Based on new age technologies such as Industry 4.0 & Artificial Intelligence Reforms

The Rising Panjab Bureau

The Industry sector in Panjab is growing in a lacklustre trajectory. According to the Economic survey tabled in the state assembly last year, unlike the national economy, agriculture and allied activities in the state continues to contribute a large share in the state’s overall value added, exceeding the share of the industry. In 2019-20, agriculture and allied sector is expected to contribute a share of 28.68 % of the state’s Gross State Value Added (GSVA) while the share of Industry is expected to be 24.11 % in the same year. The contribution for services sector is expected to be around 47.18%.

Gross value added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy.

Further, according to the Comptroller and Auditor General of India (CAG) report presented last year, during 2017-18 to 2018-19, the industrial growth rate in the state declined to 5.80 per cent from 6 per cent, while share of manufacturing sector showed a decline in growth rate from 5.90 per cent to 5.60 per cent.

According to the report, non-formulation of a timely plan for the creation of land bank, as envisaged in the Industrial Policy-2009, impacted the pace of industrial growth in the state which is dominated by Micro, Small and Medium Enterprises (MSMEs).

So, it is imperative to take effective steps for the development of the Industry especially manufacturing so it can continue to effectively contribute towards state’s economy and overall all progress including job creation.

It is pertinent to mention here that with over 2.40 lakh units (MSMEs), manufacturing by MSMEs has been the backbone of Panjab’s economy. So, the need of the hour is creation of a New Ecosystem of manufacturing based on new age technologies such as Industry 4.0 & Artificial Intelligence. For revitalising the manufacturing & MSMEs sphere in Panjab, following interventions are required:

Creation of New Focal Points

Land scarcity is a major impediment in attracting investment in the state. According to the CAG report, of the total 42 IFPs (industrial focal points) as on March 31, 2019, only three were initiated during the past 10 years i.e. after March 2009. Panjab should look at developing new Industrial areas & Focal Points keeping in view the potential of the sector in that area. For example: a new Focal Point for electronic goods manufacturing at Mohali.

Special provision for MSMEs in Land bank

To make land and industrial infrastructure available to MSMEs-certain percentage of areas could be reserved for MSMEs. For example, Karnataka has proposed separate industrial estates for micro enterprises. Tamil Nadu reserves 20 per cent of the areas for MSMEs. Panjab could also look at the same especially in the border areas.

Special provision for Industry in budget

The state government should earmark a specific percentage of its annual budget proportionate to the contribution made by the Industry, which can be spent on improving Industrial Infrastructure in the state and providing necessary amenities & services to the industry.

Creation of Marketing Fund

The Gujarat Industrial Policy proposes creating of a Common Marketing and Branding Fund to assist MSMEs in establishing market linkages. The fund is available for cluster associations for providing space at concessional rates in various trade fairs and exhibitions. A similar initiative could be started by the state also.

Ease of Doing Business

The industry is of the view that procedural delay have been acting as a stumbling block in attracting new investment.  So, to kick start the industrial growth reforms are required in many areas of industrial infrastructure and ease of doing business.  For example, strengthening of single window system along with digitisation of all the department of state government with electronic filing facilities is required.