{"id":27615,"date":"2024-02-16T08:09:42","date_gmt":"2024-02-16T08:09:42","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=27615"},"modified":"2024-02-16T08:09:44","modified_gmt":"2024-02-16T08:09:44","slug":"upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/","title":{"rendered":"UPSC Mains &#8211; What factors contribute to the slower pace of industrial development growth compared to the overall Gross Domestic Product (GDP) growth during the post-reform era? How far have the recent changes in Industrial Policy enhanced the industrial growth rate?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png\" alt=\"\" class=\"wp-image-46428\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><figcaption><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noopener\" title=\"\">Refer &amp; Earn NOW<\/a><\/figcaption><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6a7e59457accb\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a7e59457accb\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#Introduction\" >Introduction:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#Body\" >Body:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#Factors_contributing_to_slower_industrial_growth\" >Factors contributing to slower industrial growth:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#Recent_changes_in_Industrial_Policy\" >Recent changes in Industrial Policy:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#Conclusion\" >Conclusion:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" >In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-what-factors-contribute-to-the-slower-pace-of-industrial-development-growth-compared-to-the-overall-gross-domestic-product-gdp-growth-during-the-post-reform-era-how-far-have-the-recent\/#Visit_our_YouTube_Channel_%E2%80%93_here\" >Visit our YouTube Channel \u2013&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction: <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The industrial sector, constituting 27.6% of India&#8217;s GDP, plays a pivotal role in the economy. Despite the expectations that the 1991 LPG (Liberalisation, Privatisation, Globalisation) reforms would significantly boost India&#8217;s industries, the industrial growth rate has lagged behind, remaining at 2-3%, compared to the robust 6-7% growth witnessed in India&#8217;s overall GDP.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><img decoding=\"async\" data-src=\"https:\/\/lh7-us.googleusercontent.com\/996aa2Xuri6emgRf83fa7IDhytEciHRKP4XC0CZUnTiCD19b8AgCfhU_nqALYgMCYawQ4Y3V9TT4CJaPgUNT4CyNsr9SEUpdiHcPR5nBg3080tVrzb_YJAWHAlbHslcTFfTMHKV8KVB68ZfhA7nKMws\" width=\"369\" height=\"227\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" style=\"--smush-placeholder-width: 369px; --smush-placeholder-aspect-ratio: 369\/227;\"><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Body\"><\/span>Body: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Factors_contributing_to_slower_industrial_growth\"><\/span>Factors contributing to slower industrial growth:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Inadequate Infrastructure:<\/strong> India faces a significant deficit in physical infrastructure, requiring an estimated investment of $1 trillion for development. The World Bank&#8217;s Logistics Performance Index ranks India 44th out of 160 countries, indicating a need for substantial improvement.<\/li><li><strong>High Logistics Cost:<\/strong> Poor industrial infrastructure results in elevated logistics costs, making Indian goods less cost-competitive globally. India&#8217;s logistics spending is 2-3 times more than its competitors, reaching around 14% of its GDP.<\/li><li><strong>Restrictive Labour Laws: <\/strong>Complex, rigid, and confusing labour laws in India create challenges for businesses, ranking the country 163rd out of 190 in the World Bank&#8217;s Doing Business Report, indicating difficulties in the regulatory environment.<\/li><li><strong>Complicated Business Environment: <\/strong>A convoluted tax system with high compliance costs adversely affects manufacturing competitiveness. India ranks 63rd out of 190 countries in the Ease of Doing Business 2022 report.<\/li><li><strong>Low Investment in Technology:<\/strong> Outdated technologies contribute to low productivity and higher costs. India&#8217;s spending on research and development (R&amp;D) is around 0.7% of GDP, lower than the global average.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Recent_changes_in_Industrial_Policy\"><\/span>Recent changes in Industrial Policy:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-text-align-center\"><strong><img decoding=\"async\" data-src=\"https:\/\/lh7-us.googleusercontent.com\/rN-Jm_aPdPyYsPK7PcNg9GlVO8Kumo8Gb2nWLY2G7KXjcFdRvs1noBhEePmhWdrzhWqEklNoZWUvYM5syAdgJN9SASX2IH7xKF3xaDhgr7584Q8Mq13HuZ1OnjawBcgc0NFOt6MreMxREwbSWcziTiw\" width=\"590\" height=\"272\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" style=\"--smush-placeholder-width: 590px; --smush-placeholder-aspect-ratio: 590\/272;\"><\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Policy Goals: T<\/strong>he National manufacturing policy aims to increase the manufacturing sector&#8217;s GDP share to 25% by 2025, and the foreign trade policy for 2015-20 targets doubling India&#8217;s exports.<\/li><li><strong>Investments in Technology:<\/strong> The new policy seeks to attract $1.3 trillion in FDI annually, emphasizing attracting and retaining investments for technology access.<\/li><li><strong>Targeting Sectors:<\/strong> The policy focuses on leveraging strengths in sectors like automobiles, electronics, renewable energy, and banking, targeting the creation of globally scaled and commercially viable sectors.<\/li><li><strong>Tax Benefits: <\/strong>New manufacturing units benefit from a reduced corporate tax rate of 15%.<\/li><li><strong>Enhance Labor Market Flexibility:<\/strong> The policy aims at boosting job creation in the formal sector, focusing on enhancing labor market flexibility with performance-linked tax incentives.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Recent changes in industrial policy demonstrate a promising shift towards addressing issues with strategic goals, increased investment targets, and targeted sectoral development. As these policy changes unfold, they hold the potential to reshape India&#8217;s industrial landscape and foster sustained economic development.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. Learn through Videos \u2013&nbsp;<a href=\"https:\/\/bit.ly\/3vOD8sU\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><li>2. Be Exam Ready by Practicing Daily MCQs \u2013&nbsp;<a href=\"https:\/\/bit.ly\/3Q9z2nF\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><li>3. Daily Newsletter \u2013 Get all your Current Affairs Covered \u2013&nbsp;<a href=\"https:\/\/bit.ly\/3bE2y5J\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><li>4. Mains Answer Writing Practice \u2013&nbsp;<a href=\"https:\/\/bit.ly\/3mZuVxl\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Visit_our_YouTube_Channel_%E2%80%93_here\"><\/span>Visit our YouTube Channel \u2013&nbsp;<a href=\"https:\/\/www.youtube.com\/@ShabbirsEduKemyforIAS\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>The industrial sector, constituting 27.6% of India&#8217;s GDP, plays a pivotal role in the economy. Despite the expectations that the 1991 LPG The industrial sector, constituting 27.6% of India&#8217;s GDP, plays a pivotal role in the economy. Despite the expectations that the 1991 LPG <\/p>\n","protected":false},"author":17,"featured_media":27561,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[1643],"tags":[232,515,230],"class_list":["post-27615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-upsc-mains","tag-upsc","tag-upsc-cse","tag-upsc-mains"],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 4.9.9 - aioseo.com -->\n\t<meta name=\"description\" content=\"The industrial sector, constituting 27.6% of India&#039;s GDP, plays a pivotal role in the economy. 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