UPSC 2017 GS-III · 10 marks · 150 words

Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports.

What “Explain” demands

set out how or why something works, with the mechanism made explicit.

The characteristic failure: stating that it works without showing how.

What a top answer must contain

These are the checkable specifics from the marking standard for this question — the actual case, committee, datum or thinker, not an instruction to “give examples”.

  • Manufacturing stuck near 15-17% of GVA against the 25% target of the National Manufacturing Policy 2011 and Make in India
  • Causes: rigid labour law (the Industrial Disputes Act Chapter V-B threshold), the 'missing middle' of dwarf firms, land acquisition, logistics cost, power tariffs
  • The comparison that sharpens it: India lost labour-intensive apparel and footwear share to Bangladesh and Vietnam as China vacated it
  • Perverse incentives: capital subsidies and interest subvention favour capital deepening; effective protection for capital goods
  • Measures: implementing the labour codes, PLI for textiles and toys, plug-and-play parks, FTAs for market access, cluster and MSME credit reform

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