Magnets for Manufacturing

www.gradeup.co Magnets for Manufacturing Context • Numerous Multinational companies are shutting down their manufacturing units in China. • They are planning to relocate their manufacturing units to other destinations. • Many of these Multinationals based in China have initiated discussions with the Indian government to relocate their plants to India. • Narendra Modi’s emphasis on using the COVID-19 crisis as an opportunity to pursue the goal of a self-reliant India must be viewed against this background. Reason • Companies are expected to exit China due to three primary reasons. o Supply chain disruptions in the country caused by COVID-19. o Fear of Chinese dominance over the supply of essential industrial goods. o Growing risk and uncertainty involved in operating from China in the light of geopolitical and trade conflicts between China and other countries. India’s Preparedness • India lags far behind China in manufacturing prowess. • China ranks first in contribution to world manufacturing output, while India ranks sixth. • Against India’s target of pulling up the share of manufacturing in Gross Domestic Product (GDP) to 25% by 2022, its share stood at 15% in 2018, only half of China’s figure. • China’s manufacturing sector grew at an average annual rate of 10.68% since China opened its economy in 1978. In contrast, India’s manufacturing sector has grown at 7% in last three decade • China was the second largest exporter of manufactured goods in 2018. India is not part of the top 10 exporters of world. Constrains in Development of Manufacturing Sector in India • This contrasting trend between manufacturing sector growth of China and India is not surprising. • India faces numerous constraints in promoting the manufacturing sector. These challenges are mentioned below o Poor state of infrastructure. o Disadvantageous tax policy accompanied with Red tapism o Non-conducive regulatory environment o High cost of industrial credit o Lack of skill in the workforce o Rigid labour laws o Restrictive trade policies o Very low expenditure on Research, Development and Innovation o Complicated land acquisition law with uncertainty in acquisition due to public protest. o Inability to attract large-scale foreign direct investment into the manufacturing sector. • Unless these challenges are addressed, the dream of making India a manufacturing powerhouse rivalling China would be difficult to realise. Role of States www.gradeup.co • Availability of land area for manufacturing unit is an important factor in development of manufacturing sector of any region. • This is the reason why manufacturing growth in India has been s centered majorly in Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh. • However, what is of concern is that Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, Odisha, Rajasthan, Telangana, and West Bengal that also have large land area contribute disproportionately little in manufacturing GSDP. • In a fedral state like India, solution to these constraints cannot be possible without the active participation of State governments and effective policy coordination between the Centre and the States. Way Forward • State-specific industrialisation strategies are needed to solve the specific problems of particular state. • These strategies should be implemented in a mission mode with active participation of the Central government. • Strong and carefully designed policy actions on the part of individual States would improve India’s overall investment climate, thereby boosting investments, jobs, and economic growth. • It demands formation a Strategy Groups consisting of representatives from the Central and State governments along with top industry executives. References • https://www.thehindu.com/opinion/op-ed/magnets-for- manufacturing/article32440463.ece • https://www.thehindubusinessline.com/markets/stock-markets/companies-moving- out-of-china-will-india-seize-the-opportunity/article31418116.ece www.gradeup.co Living with the earth in Kerala Context • A landslide occurred on August 6 at Pettimudi, a hamlet in Rajamala ward under Munnar village panchayat in Kerala’s Idukki district. • Then on 7th of August an Air India plane crashed at Khozhikode Airport in Malappuram district. • In last few years, Natural disasters have become regular feature of the annual monsoon season in Kerala. Details • The estimated death toll in Idukki landslide had reached 65 with some persons still missing. • In addition to that 20 lives were lost in Air India plane crash at Kozhikode airport. • Last year, 59 people lost their lives in a similar landslide at Kavalappara in Malappuram district. Khozhikode Airport • The Kozhikode airport has a table-top runway. • This Airport has been on the regulator’s watch list after the Air India Express Boeing 737 crash in Mangaluru in May 2010. • Mangluru Airport also had tabletop runway. • It is said that accumulation of rainwater due to heavy rain and erratic wind at tabletop runway were the two possible factors behind crash. Idukki Landslide • There was a heavy rain in Rajmala district between August 1 and 7. • The location where the landslide was triggered has a 40° slope • Any slope above 20° is vulnerable to slipping during heavy rain. • The soil of the area has a high content of sand, which absorbs more water, takes a loose form, and is at risk of slipping down. • Human interventions such as heavy loading on the slopes caused by buildings without adequate protective measures on the uphill and downhill sides have made the area particularly vulnerable to landslides. Development Model • These accidents serve as a reminder that further hardship awaits us if we do not give away the development model that has come to characterise the State. • Although Kerala has received wide acclaim for having achieved social indicators associated with high human development, but the norms associated with environment protection and sustainable development have been violated everywhere in Kerala • The rivers have been polluted • Hill slopes have been dynamited for quarrying • The valleys are filled with garbage and the hills penetrated to accommodate residences and religious. • Year-round water availability and the nutrient content of the soil has diminished. • It has impacted sectors of the economy such as agriculture. • It is quite extraordinary that this has all taken place in a State that has been hailed by a section of the intelligentsia as representing the gold standard of development. • This unsustainable development and no respect for nature have resulted into the frequent flood and landslides in the state. www.gradeup.co Who is Responsible? • The state of natural capital in the State reflects an absence of governance. • Political parties everywhere are reluctant to promote at the cost of the aspiration for greater consumption of people • They fear that it affects their electoral prospects. • An extreme example of this being the proposal for an airport serving Sabarimala, which if it were to fructify would be the fifth in this small State. • Though the plane crash at Kozhikode cannot so easily be construed as resulting in the destruction of natural capital • It can be seen as trying to extend the limits nature imposes, with consequences for our security. • Tabletop runways are very common all around the world. • Airports on India’s southwest coast have to face the double challenge of the monsoon which produces hazardous conditions for landing and heavy traffic. • Ever since the crash of a flight in Mangaluru, an airport with similar characteristics, in 2010, it has been apparent that flights to Kozhikode are vulnerable. • The answer to the problem would have been to reduce the traffic on the airport and to take wide-bodied aircraft off the menu. • Experts on air safety have spoken publicly of how they had raised concerns about Kozhikode soon after Mangaluru. • Political establishment in Kerala overruled the suggestions. • We the people are no less culpable by nurturing consumption aspirations unmindful of the contours of the earth. Conclusion • It is useful to recall the belief that Kerala was named for its geography. • For centuries, its people demonstrated a genius for conserving natural resources by restraining their consumption. • Building local infrastructure to support this consumption has become a threat to life. • For the State to have a future, consumption has to be limited so that the State’s natural capital is not irretrievably lost. References • https://www.thehindu.com/opinion/lead/living-with-the-earth-in- kerala/article32440705.ece • https://www.hindustantimes.com/india-news/expert-who-investigated-mangaluru- accident-lists-reasons-for-kozhikode-plane-crash/story- MUEA13xMTAwaz96muovwVJ.html#:~:text=Earlier%2C%20Directorate%20General% 20of%20Civil,and%20broke%20into%20two%20pieces. • https://indianexpress.com/article/explained/how-kerala-munnar-landslide-happened- 6549373/ .

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