INVESTMENT FOR EMPLOYMENT
Manufacturing Sector - The backbone of economic development
Manufacturing sector has been the backbone of economic development in Gujarat all these years. Over a period of time as mentioned earlier, the state could successfully diversify its manufacturing base from a lone sector of textile industry. Today the state manufactures a wide spectrum of products with a substantial share in country’s production. In fact, it is this mature manufacturing base that has enabled Gujarat to earn the distinction of a leading industrialized state in the country. Development of such a strong manufacturing base could be attributed largely to the available resources, technological skills, reasonably well-developed infrastructure, good institutional network, people having strong business acumen with enterprising nature and pragmatic policies adopted by the successive Governments.
Need to strengthen manufacturing sector
In the quest of attracting new investments, the state however, realizes not to ignore the existing manufacturing sectors. In fact, the state perceives that the emerging areas of investments should also depend upon the successful survival of the existing manufacturing segments and Gujarat would therefore strive to strengthen them, as these very segments have been largely responsible for the industrialization drive all these years in the state. The Government would therefore, provide effective interventions to ensure that they not only survive but, thrive in the times ahead.
Till the decade of 80s, the operating environment in India was under the shadow of closed economy. Though in the beginning of the decade of 90s, the Government of India started the process of economic reforms, but in most of the states, the operations at the state level more or less were confined under the principles of closed economy. During the initial phase of economic reforms, leading industrialised states like Gujarat could derive maximum advantages in terms of attracting investment as the erstwhile regime of controlled economies had placed certain locational restrictions which were removed from 1991 onwards and the state therefore, could attract reasonably a large chunk of investments. But with the beginning of the phase of liberalisation and globalisation in the true sense sometime in the end of the last decade, the industrialised states did not get any specific advantages in terms of growth of economy and investment, as by then many other states also started catching up with them in terms of economic development. Again, by 2000 AD most of the states agreed to withdraw the incentives given in the form of subsidies and sales tax and Gujarat was also one of them.
Strategise for a paradigm shift
The New Industrial Policy thus has an essential element of paradigm shift and willingness to address the requirements on long-term basis. It is felt that this is the right time for the state to bring about qualitative change in its thinking and strategy. We in India in general and Gujarat in particular realise that we must build upon our strength and not replicate the models developed in other countries… the models which can not be translated into our system. Gujarat therefore, would promote skill-based industries and would not go for mass production items. It was again in the backdrop of this reality, the state would immediately address the concern in respect of the weaknesses of manufacturing sector and then lay down a path for evolution of research and development, design innovations, cost efficiency, capacity building through skill upgradation and productivity. For the purpose, the Government would provide interventions by way of introducing certain schemes, which would strengthen its core manufacturing sectors. While doing so, the state would also take steps for the growth of such service sector activities, which would ride on the top of the manufacturing sectors, in order to harness the benefits to their optimum potential.
GOVERNMENT INTERVENTIONS
In order to strengthen the manufacturing sector, the Government has decided to provide interventions in following manner :
Sectors under focus
The Government therefore has decided to immediately focus on specific sectors in view of strategic comparative advantages enjoyed by the state in the global context. For the purpose, the Government proposes to adopt a Mission Mode Approach.
Textiles
In case of textiles, the areas that could be concentrated are: improving the productivity of cotton, doubling the current consumption of cotton and manmade fibre in next five years’ time, increased production of garments, promotion of spinning and weaving activities in a big way, etc. A Core Group to study all the relevant issues will be formed and based on the recommendations; the Government will provide effective interventions.
Apparel Parks
Apparel parks will be set up in Surat and Ahmedabad in order to increase the production of apparels both for exports and domestic consumption. Interventions in terms of setting up of the parks, laying down guidelines for setting accredited private training institutes etc will be taken up in a time bound manned.
Gems and Jewellary Parks
Gems and Jewellary parks will be set up at Surat, Ahmedabad, Bhavnagar, Rajkot and Bhuj. In addition, the Government would also encourage setting up such parks in the private sector. Accredited private training institutions will be set up to impart training.
R&D Institutions and Centres of Excellence
The 21st century belongs to the age of innovation, research and development where the products of the mind will generate more wealth than the products of factories. Areas of design, product development, continuing innovation, development of new technologies and their commercialisation through global network of outsourced manufacturing would hold the promise for future development. It is in this context that the importance of R&D in areas of comparative advantages for Gujarat becomes imperative. The Government, in conjunction with industry, would like to support the creation of Centres of Excellence in areas as diverse as engineering, chemicals, textiles, garments, pharmaceuticals, plastics, agro food and so on, either afresh with matching funds from industry or create special centres for research in existing laboratories/institutions. It is important that industry takes the lead in conceptualising the activity and setting the agenda for their future technological development. The Government solicits proposals from various industries and their associations in this regard.
State Awards for Excellence
Government would also like to recognise merit amongst institutions that take up the challenge successfully for development of products and new technologies. For this, the Government would institutionalise state awards for excellence for such institutions in due course with the support of industries in Gujarat.
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