SME Futures Editorial
The PHD Chamber of Commerce and Industry (PHDCCI) has proposed an ambitious five-pronged strategy to accelerate economic growth and create employment opportunities across India. The strategy emphasises bolstering the manufacturing sector, empowering MSMEs, enhancing rural demand through agricultural reforms, boosting export competitiveness, and fostering collaboration between universities and industries.
In its agenda for the government’s first 100 days, PHDCCI recommended formulating a National Employment Policy with a mission-driven approach and quarterly targets to strengthen India’s journey toward “Viksit Bharat” by 2047.
Prioritising the manufacturing sector
Highlighting the sector’s current contribution of 16 per cent to India’s GDP, PHDCCI President Hemant Jain stressed the need to raise this share to 25 per cent by 2030. Achieving this would require targeted measures to reduce manufacturing costs related to capital, power, logistics, and compliance.
Achieving this target will require a focused approach to improve productivity and reducing the cost of key manufacturing inputs including the cost of capital, power, logistics, compliances, and land, said Jain in a press statement.
“The government has already made significant progress by removing over 42,000 compliances, but further reforms at the factory level are essential to enable businesses to employ more workers,” said Jain.
Further, more needs to be done for the ease of doing business at the factories level so that entrepreneurs are able to deploy more and more workforce in their respective premises, he adds.
Strengthening MSMEs
The MSME sector, contributing 30 per cent to India’s GDP and employing over 110 million people, remains a critical pillar of economic resilience. Globally, MSMEs have been pivotal in driving job creation, and India is no exception.
Jain pointed out the challenges that hinder MSMEs, including financing, technological advancements, and regulatory complexities. He emphasised enhancing the collateral-free credit guarantee scheme to help MSMEs meet their working capital needs and scale effectively.
Boosting rural demand and agricultural reforms
The third pillar focuses on boosting rural demand by enhancing agricultural incomes. Rural demand, a significant economic driver, has a cascading effect on manufacturing and services sectors, creating employment opportunities in various industries.
“As rural incomes rise, so will the demand for manufactured goods, housing, and services, spurring growth across sectors and deploying more workers,” Jain explained.
Enhancing export competitiveness
PHDCCI aims to elevate India’s export potential to USD 2 trillion by 2030, split equally between merchandise and services exports. With exports reaching a record USD 778 billion, the target is ambitious yet achievable through improved trade facilitation, customs efficiency, and reduced logistical costs.
India’s export strategy must focus on high-value goods and services in sectors such as technology, pharmaceuticals, textiles, and agriculture, along with leveraging global value chains. “We need to enhance global trade agreements and invest in infrastructure to boost export growth year-on-year,” said Jain.
Fostering university-industry linkages
Strengthening ties between academia and industry is the fifth pillar of the strategy. By establishing incubation centers, supporting start-ups, and fostering innovation, India can bridge the skills gap and prepare its workforce for high-tech jobs in biotechnology, robotics, and IT.
“These linkages will enhance employability and ensure our youth are equipped to meet industry demands,” noted Jain.
