Services -sector tree then why manufacture in the country; What are the three major reasons? - India economic growth needed for new generation reforms and MSME focus

Updated: Mon, 22 Sep 2025 07:18 PM (IST) India’s economic growth increased after 1991, but the manufacturing sector sat in GDP at 15-16%, while the service sector reached 55%. According to Fism reports, India needs new generation reforms in three categories to promote manufacturing. Digital Desk, New -Delhi. The rate of Indian economic development has remained slow for decades. Vikas gained momentum after the economic reform of 1991. Later, the liberalization led by the World Trade Organization (WTO) further improved this rate. Despite the political instability in the middle, the nation has increased twice compared to the past five decades after 1991. Remove ad, just read the news. These reforms were mainly focused on trade and outdoor area. It has raised global competition for domestic manufacturing, but due to a lack of internal reforms, industrial expansion has stopped and only an increased service sector. The manufacturing contribution to GDP (GDP) is constantly making about 15-16 percent, while the services reached from 38 percent to 55 percent. A lack of work in sufficient number of good salary manufacturing has since been a permanent challenge. It is a consensus between experts and well-known economists that the economy of India is performing less than 2-3 percent due to self-made obstacles. They are talking about ‘new generation reforms’ that can overcome these obstacles. What are these improvements? The experience of micro, small and medium businesses also confirms these demands. The inherent obstacles in India’s manufacturing ecosystem prevent entrepreneurs from using their full potential. In 6.4 Crore businesses remain 99 percent subtle and are barely one percent small, while the size of medium businesses is so small that it is less than 0.5 percent. There are no more than 30 lakh industrial electricity connections in a country of 140 crore, and the number of factories working on more than 10 people is barely 2.5 lakhs. The result is before us as a very small -scale industry, informal employment and inability to face global competition. There is a need to initiate a new wave of structural reforms to achieve strong and durable industrial development in the eyes of micro, small and medium businesses. According to the national organization ‘Fism of small-scale industries, these reforms can be divided into three categories: category number-1 regulator improvement factors of production markets and improvements to make manufacturing-friendly improvement. Although businesses that work out of homes and unauthorized places need formal recognition, the regulatory system of industry with public-private collaboration will have to be simplified. The administrative system of cities, development and master plan design must be reconsidered. Property and partnership will have to be brought under the IBC Act to enable the entrepreneur to establish new industries, even after failure and to prevent suicide after the failure by entrepreneurs. Category number-2-bank and financing sector also requires improvement. In the current situation, RBI has failed to protect the interests of clients and entrepreneurs. To solve this problem, there is a need to set up a new integrated regulator by including banking, Fintech and insurance. Category number-3 availability and price of raw materials is also a major problem. Restrictive trading policies have created monopoly in the market, making the downstream MSME unpredictable. Therefore, economic theory must be followed by lowering the fee on raw materials and leaving more fees on completed products. Often MSME groups suffer from technical backwardness. MSME needs a technological mission to identify technical deficiencies in important product categories/sub-sectors and to comply with this deficit through indigenous research and developmental institutions or to comply with joint ventures by encouraging joint ventures with advanced economies in Eastern and South East Asia. This mission can study in a phased way and prefer the most endangered products. Also read- How will India become developed countries, what are the eight reforms that will boost GDP?