Question

Why does the economic strength of a country is measured by the development of manufacturing industries? Explain with examples.

Answer 1

Hint: After processing the raw materials, the production of goods in large quantities to more valuable products is known as manufacturing. The development of manufacturing industries is the measure of the economic strength and growth of a country. One of the key reasons is that agriculture and manufacturing industries are connected to each other.

Complete answer:
The manufacturing sector is considered as the backbone of economic development in particular and development in general mainly because–
1. Manufacturing industries help to modernize the agriculture sector, which is the backbone of our economy. By providing jobs in secondary and tertiary sectors, these industries help to reduce the heavy dependence of people only on agricultural income.
2. Industrial development is considered a precondition for the eradication of poverty and unemployment in our country. In India, this was the main philosophy behind joint sector ventures and public sector industries. It was also aimed to bring down the regional disparities by establishing industries in the backward and tribal areas.
3. Exporting the manufactured goods expands commerce and trade, and also brings much needed foreign exchange.
4. Countries become prosperous when they transform raw materials into a variety of furnished goods of higher value. Our country’s prosperity lies in diversifying and increasing its manufacturing industries as fast as possible.
Out of a total of 27 percent GDP, for the industry that includes 10 percent for quarrying, mining, gas, and electricity, over the last two decades, the share of the manufacturing sector has stagnated at 17 percent. This is much lower in comparison to some of the East Asian economies, where it is 25 to 35 percent. The trend of growth rate in the manufacturing industry over the last decade has been about 7 percentages per annum. The desired growth rate over the next decade is 12 percentages. Since 2003, per annum, the manufacturing is again growing at the rate of 9 to 10 percent.

Note: With the help of many policy interventions by the government and renewed efforts by industries to improve productivity, economists predict that the manufacturing industries can achieve their target over the next decade. The NMCC or the National Manufacturing Competitiveness Council has been set up with this objective.