As India aims to become the manufacturing destination of the world, it is witnessing an increasing contribution from hundreds of small towns and cities across the country courtesy focused government initiatives towards ‘Make in India’. Cities such as Coimbatore, Surat, Rajkot, Ludhiana, Agra, Nagpur, Gurugram, Noida and Pune are witnessing the emergence of billionaires led by a thriving industry in these small towns.
Information from the Government of India states that the year 2021-22 recorded the highest ever FDI at $83.6 billion and was invested across 31 UTs and States and 57 sectors in the country. The Production Linked Incentive (PLI) scheme, which was launched in 2020-21 to further promote Make in India and incentivise domestic production, has been witnessing increasing traction from companies, further enabling the diversification of manufacturing to smaller towns and cities.
This steady increase in inflow of investments into manufacturing along with warehousing is bringing cheer for an unlikely beneficiary in the form of socio-economic development of citizens from smaller towns. With new jobs and entrepreneurship opportunities, there’s many reasons for citizens from small towns to look up to a bright future.
Opportunities galore in small towns of India
The democratisation of manufacturing and associated activities across the country is opening up a plethora of opportunities for employment and entrepreneurship in smaller towns. From raw materials to manufacturing and assembling, packaging and warehousing and transportation, ample opportunities are being created across the value chain. This is leading to a significant improvement in income, skills and literacy levels, life expectancy and enhancing less-tangible factors such as personal dignity, freedom of association and participation in civil society. From garments to spices and toys to indigenous products, small towns are gradually becoming the mainstay for manufacturing-based industries owing to low inputs costs, seamless movement of goods enabled by the Goods and Services Tax and availability of abundant manpower. This is also reducing migration of people, which means people are able to stay with their families and do not have to venture out in search for greener pastures, eventually leading to greater satisfaction levels. This is enabling a bigger section of the workforce entering the organised sector which becomes crucial in their overall well being with financial inclusion, insurance cover and enhanced incomes.
For instance, the Government of India’s One District One Product (ODOP) initiative which provides the framework for value chain development and alignment of support infrastructure, has created waves even in remote areas of the country. Under this initiative, incense sticks makers from West Tripura have received a new lease of life through large scale utilisation of the wood from agar tree, an evergreen tree used for aesthetics reasons, religious worship and meditation. With the ODOP initiative, these entrepreneurs are getting access to a large market beyond their geographies, contributing to their prosperity and driving economic activity in their region. Many such stories are unfolding across the country with nearly 700 products identified under the ODOP scheme across 35 states and union territories changing the lives of citizens. In the state of Uttar Pradesh, nearly 80,000 people have been trained under this initiative and several other states are actively identifying new clusters to be included.
The mushrooming of micro, small and medium industries in towns and cities also contribute towards the establishment of a developmental society which takes care of its citizens with proper health care facilities, upliftment of the poor and taking care of the needy. While the Corporate Social Responsibility Act mandates companies to spend 2 per cent of their net profits over the preceding three years on societal development, creating an equitable society helps boost the morale of employees residing in the region and attracts more citizens to join the workforce. This assumes significance as India, which used to be an agrarian led economy, has transformed over the years into a manufacturing-services led economy and the development of its citizens play a pivotal role in fast tracking and sustaining the economy’s growth.
Development paves the path for an equal society
As manufacturing entails hundreds and thousands of people working under the same roof, sharing the same food and celebrating festivals of all faiths, this eradicates socio-economic and cultural differences and contributes towards the creation of an equal society. While India is moving towards being a middle class from a lower middle class economy, the empowerment of the middle and lower strata of the society holds immense importance in creating a shared value for everyone. And while this process had started a few years after independence, the establishment of industries has paved the way for the creation of an equal society. These have led to a significant reduction in unemployment rates, empowered women and even people with disabilities to participate in the mainstream and lead a dignified life.
Today, companies in the manufacturing and logistics are laying special emphasis on the greater involvement of women in the workforce across roles which earlier used to be referred to as male bastian. This is because research has established that the presence of women in the workforce enhances productivity, helps maintain discipline and results in higher customer satisfaction scores. This has particularly come to the fore in e-commerce logistics where women delivery executives are leading the charge of deliveries from apparel to electronics to furniture and food.
As India is enroute to become a $10 trillion economy by 2035 from the current $3.1 trillion, the democratisation of the manufacturing and warehousing sector attains significance as it is one of the largest employment generators in the country and constitutes a great proportion of country’s Gross Domestic Product (GDP). This growth hinges on the empowerment of people enabling it from hundreds of small towns across the country and therefore, organisations should invest greatly in developing and maintaining the socio-economic fabric they are operating into.