| Paper | GS Paper 3 |
| Word Limit | 150 words |
| Syllabus Topic | Industrial policy and its effects on industrial growth |
Model Answer
Manufacturing creates jobs, exports and productivity. Yet its share in GDP is well below the 25% target of the National Manufacturing Policy, 2011. MSMEs, which form most Indian firms, are key. But most stay micro – the “missing middle” problem.
Present Policies
- Make in India (2014), PLI schemes (2020) boost domestic production.
- Revised MSME definition (2020), based on both investment and turnover.
- Credit: CGTMSE guarantees for collateral-free loans.
- Delayed payments: TReDS and the 45-day rule under Section 43B(h) of the Income Tax Act.
- Formalisation: Udyam Registration; PM Vishwakarma.
- Market access: GeM and public procurement quota.
Gaps
- Costly credit and heavy compliance burden.
- PLI benefits go mostly to large firms.
- Weak technology and skills in small units.
- Low export linkages and branding.
Conclusion
Cluster-based support, cheaper credit and links with large firms can make MSMEs the engine of manufacturing-led growth for Viksit Bharat 2047.
Related PYQs
- Account for the failure of the manufacturing sector in achieving the goal of labour-intensive exports rather than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports. (2017)
- Discuss the rationale of the Production Linked Incentive (PLI) scheme. What are its achievements? In what way can the functioning and outcomes of the scheme be improved? (2025)
- “Industrial growth rate has lagged behind in the overall growth of Gross-Domestic-Product (GDP) in the post-reform period.” Give reasons. How far are the recent changes in Industrial Policy capable of increasing the industrial growth rate? (2017)
See the full paper: GS 3 Question Paper – UPSC Mains 2023
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