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Past Issue • Jan-Mar 2012

The New National Manufacturing Policy: A Flow Perspective

The New National Manufacturing Policy:  A Flow Perspective

Professor ManMohan S Sodhi discusses the implications of the new National Manufacturing Policy (NMP) on various aspects of India’s development.

The new National Manufacturing Policy (NMP) with its National Investment and Manufacturing Zones (NIMZ) has been finally approved and comes at a crucial time with the country facing a lower gross national product (GNP) growth compared to the recent past, smaller net inflow of foreign investment, domestic politics creating paralysis, and a sharply devalued currency. Improving manufacturing makes sense: manufacturing is not only connected to other sectors but is also the jewel of a multi-strand necklace where the strands are flows of different kinds to and from other sectors. This article considers such flows in analysing the NMP and other proposals. My conclusion is that the government is taking a holistic approach to manufacturing, considering the different flows needed to make India a major economy. However, the government must further consider such initiatives as creating an Internet superhighway, virtual manufacturing zones to support IT solutions for industry clusters, finding supply-chain finance solutions to help tier-2 suppliers, usually [SMEs] and finding creative solutions for land use. In addition, the government must further skills development for the manufacturing sector for the long term.

ABOUT THE AUTHORS

  • Sodhi

    ManMohan S Sodhi

    Executive Director of the Munjal Global Manufacturing Institute at the Indian School of Business (ISB).
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