China with its economic liberalisation policy has occupied the position of being the “world’s factory” accounting for about 30 per cent of the global manufacturing production in recent years. The USA, Japan, Germany and South Korea are among the top five in terms of share of global manufacturing output. The share of India, however, was about 3 per cent only though it is expected that in the coming days the countries such as India, Vietnam, Mexico, Malaysia and Singapore will perform better.
The political decision of the Government of China for allowing foreign investment and economic reform in the eighties has resulted in such a massive growth of the manufacturing sector. It was said that economic development and enhanced living standards are the best defence that has demonstrated the superiority of socialist system. Though late, the economic liberalisation policy of India is slowly getting more open up and moves to facilitate the manufacturing sector to become a global potential modern hub.
India already has a potential IT work force and customer based service centers with many advantages of available natural resources and port facilities for advantageous trade. The growth of a domestic manufacturing ecosystem depends more on basic infrastructure development and skilled manpower which are highly essential. The Government has been engaged in building huge infrastructure to meet the growing need of the coming days. But it is found that the investment taking place in different parts of the country is uneven and non –inclusive of backward States and regions having more number of marginalised sections.
The major manufacturing clusters are coming up in States of Maharashtra, TN, Gujarat, Karnataka, UP, AP and Telangana. The TN has the largest number of factories and with three major ports. Chennai is the industrial and commercial centre with Chennai-Tirupati-Nellor tri city industrial hub becoming a more attractive destination for manufacturing. The areas of Noida-Greater Noida, Yamuna Expressway, Gurugaon and Manesar-Bawal belt with Jewar International Airport are coming up as major hubs for Chinese factories. The Delhi –Mumbai corridor, NH-48, terminates at Chennai traversing through seven States, Mumbai-Aurangabad corridor, Pune industrial area, Ahmadabad, Vadodara- Bharuch cluster, Bangalore –Hyderabad are becoming silicon valley. It may be good for the States and country as a whole but the ongoing industrial growth is not balanced and inclusive of regions and States lagging behind industrialisation. The fact is India is heading towards a situation where we have industrially poor and backward States as well as more industrial advanced States. The poor and backward States will continue to be the suppliers of poor migrant workers to the industrially advanced States; thus the regional imbalance will continue. The country will have a few mega business and industrial centers and many regions left out with inherent backwardness. There will not be a balanced growth of backward regions at par with others. This is not Sabka Saath Sabka Vikas. We cannot build a nation with so many differences in economic infrastructure for a quality living.
The Chief Ministers of different States hold conferences with corporations and there has been a competition among States to attract industries. Now almost all the States have started offering as much subsidy as possible to private companies. In a recent move, the Government of Odisha has made a cabinet decision to offer as much as possible relaxation in ensuring inputs for private industry at the cost of the public treasury. On the other hand, State investment for building the public sector has been discouraged with the saying that the State has no business to do business. This competition among unequal States will not be beneficial for the poor States. The Center must help the poor States in building public infrastructure such as railway, port, airport, and highways to boost industrial growth. Along with infrastructure, the Center must support the States to build world class quality education and skill development centers to make the youth employable in upcoming manufacturing industries. The development of infrastructure for industrialisation is not the sole duty of the States alone because mostly the railway, airport, sea port, National Highway, Express Highway and other communication links are under the legislative and administrative control of the Central Government.
It is found that the Government of India has been investing more on already developed areas and States having relatively more number of industries while it is continuously neglecting the poor States an backward regions which are still struggling with mobilisation of capital for infrastructural development especially for the manufacturing sector. The mineral resource rich zones of the country such as Odisha , Chhatisgarh, Jharkhand and West Bengal remain industrially backward because only extractive industries have taken place here, mostly mining activities. The freight policy of the Central Government in the 1950s has discouraged mineral based industries in these States and industrialization has taken place in other parts of the country.
The constitutional provisions have allowed limited resource federalism by which the State ownership over its resources has been minimized through Central legislation that has put restrictions over the State's own plan for industrialisation. The nation must pay back to the mineral resource rich States their dues and compensate their loss they incurred over years due to discriminatory economic policies of the Center.
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