The recently released ‘The Indian Economy – A Review’ by the Department of Economic Affairs, Finance Ministry, has revealed a notable surge in industrial growth, showcasing a likely 8% per annum growth trajectory for the triennium ending March 2024.
The report attributes this growth to strategic government initiatives, particularly emphasizing the success of ‘Make in India’, the Production-Linked Incentive (PLI) scheme, advancements in the MSME sector, the Open Network for Digital Commerce, and achievements in Large-Scale Electronics Manufacturing.
Make in India & PLI
As per the report, under the ‘Make in India’ initiative, the government has taken targeted measures to fortify domestic manufacturing and enhance self-reliance across various industries.
A key driver in this endeavour has been the PLI scheme, encompassing 14 sectors. The scheme, with an outlay of Rs 1.97 lakh crore, has approved 746 applications by December 2023, benefiting 176 MSMEs.
Notable outcomes include an investment exceeding Rs 1.07 lakh crore, leading to production/sales of Rs 8.7 lakh crore and the generation of over 7 lakh jobs. Exports under the scheme have surpassed Rs 3.4 lakh crore, with significant contributions from large-scale electronics manufacturing, pharmaceuticals, food processing, and telecom and networking products.
The report noted that the key achievements under the PLI scheme include substantial value addition in mobile manufacturing, successful import substitution in telecom, significant reduction in raw material imports in the pharma sector, increased turnover in the drones’ sector, and enhanced domestic sourcing of raw materials in food processing.
Supporting Measures
The report highlighted the increasing vibrancy and dynamism of Micro, Small, and Medium Enterprises (MSMEs), propelled by supportive government measures.
The Union Budget for FY24 facilitates timely payments to MSMEs by allowing tax deductions only when payments are made. Amendments in the Micro, Small, and Medium Enterprises Development Act mandate interest payments on delayed payments to MSMEs, providing a boost to their financial health. The Udyam portal and Udyam Assist Platform (UAP) have streamlined information on MSMEs, with 2.24 crore MSMEs registered on the Udyam portal and 1.2 crore units on the UAP.
The PM Vishwakarma initiative, introduced in September 2023, offers holistic support to artisans and craftspeople, attracting 48.8 lakh enrolments by the end of December 2023.
Furthermore, the report noted that the Open Network for Digital Commerce recorded over 6.3 million transactions in November 2023. Regulatory reforms, including the decriminalisation of 3,600 compliances, have significantly improved the ease of doing business. The Jan Vishwas Amendment Bill 2023, aiming to decriminalise 183 provisions across 42 Central Acts, further enhances the business environment.
Similarly, the report noted that under the Pradhan Mantri Mudra Yojana, an impressive Rs 25.98 lakh crore has been disbursed to non-corporate, non-farm small and micro-enterprises. The Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) saw a significant boost in credit guarantee limits, rising from Rs 2 crore to Rs 5 crore in April 2023. Guarantees under the Emergency Credit Line Guarantee Scheme (ECLGS), part of the Aatmanirbhar Bharat package, have reached Rs 2.4 lakh crore.
As per the report, the Unified Logistics Interface Platform (ULIP), a cornerstone of the National Logistics Policy, has seamlessly integrated with 35 systems across eight different ministries, attracting 699 industry players.
It also cited a report by Bernstein, which emphasized a significant reduction in logistics costs for trucks, coupled with an increase in distance travelled per day after the implementation of GST. It was highlighted that the government’s robust capex push, coupled with measures to increase domestic steel production and focus on affordable housing, has resulted in a remarkable 12% per annum growth in the construction sector from FY22 to FY24.
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