ADVANCING AHEAD

For India to be really Atmanirbhar, it is important to understand the vital role Electronic Manufacturing and the overall Manufacturing sector has to play in nation building and in employment creation for the country’s future generations.

The Indian Manufacturing industry has the potential to be the biggest employment generator in India. The sector which accounts for 14 to 18 percent of GDP is one of the core areas along with the Agriculture and the Service sectors to generate employment and lead the nation to economic prosperity. In the past five fiscal years, from FY16 to FY20, the gross value addition (GVA) of the sector was estimated to be $397.14 billion in FY20PE, with a CAGR growth of 5 percent as per the national income given by the Government of India. An important part of Indian manufacturing, the Electronics Manufacturing sector, which accounts for 3 percent of the global electronic production, has a major role to play in the employment generation within the sector.

Navigating through challenges

While the sector has immense potential, it has to navigate several challenges for it to play a larger role in employment creation. Hit by the pandemic, the Manufacturing sector contracted by 40 percent in the first quarter of FY21. The supply chain as well as the distribution network was severely disrupted. There is also the challenge of dispersed skilled workforce who migrated to their hometowns and villages during the lockdown. The current uncertainties are preventing reverse migration to industries. Indians have faced severe financial duress due to the heavy impact on jobs, salaries, and health of people. The liquidity crunch and low demand have also affected the sector.

Having said that the Indian electronics manufacturing is reviving quite significantly. As per the government projections, Indian electronics manufacturing is expected to set a record annual growth rate of approximately 30 percent in the next five years, which would create an estimated over 8 lakh jobs.

Government support

The measures introduced by the Government of India have provided the much-needed impetus to the sector. The Ministry of Electronics and Information Technology launched the National Policy on Electronics, which aims to make India the hub of electronics system design and manufacturing and generates a revenue of $400 billion in five years.

The Government has also introduced several other initiatives such as Modified Incentive Special Package Scheme (M-SIPS), Electronic Development Fund (EDF), Production Linked Incentive (PLI) Scheme, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme, amongst others.

These initiatives are designed to address several objectives including covering risk to both industry and academia for R&D of new electronics technology; boosting domestic manufacturing in mobile phone production and specified electronic components by attracting large investments in the segment; giving financial incentive of 25 percent on capital expenditure for an identified list of electronic goods which include products such as electronic components, semiconductor/display fabrication units, ATMP units, specialized sub-assemblies, and so on.

Electronics manufacturing and job creation

With the kind of Government support and the tremendous enthusiasm in the industry to boost growth and chart a revival process, the rise of manufacturing sector will create more jobs for people for the following reasons.

Manufacturing – a complete ecosystem : The growth in electronics manufacturing basically leads to building of a complete ecosystem, which includes real estate, infrastructure, service sectors and so on. As the sector grows, there would be a growing need of skilled people across verticals from warehouse and plant management, house-keeping staff, transport, printing and packaging, smart accessories and so on. Employment will be generated at wholesale/retail and supply chain partner levels as well. Therefore, the Manufacturing sector not only creates employment in its own field, it also creates employment opportunities in the Service sector as well. The same cannot be said about the Agricultural sector.

Direct employment creation : It is estimated that the Manufacturing industry is largely operating with about 75 percent capacity utilization. As the economy revives and the demand for electronic products increases, these industries will become fully operational. The industry would need more of project managers, designers, component makers, specifiers, circuit builders, panel builders, electrical engineers, testers, and service and repair professionals, among many others. Hence, there will be employment creation across top, mid, and bottom levels.

Employment creation due to skill development : The growth in the sector will create demand for more skilled persons, which would need many small-, medium- and large-scale skilling and upskilling initiatives. The various institutions that will be established for skill development will further create job creation in India. As the Electronics Manufacturing industry does not necessarily need a highly qualified workforce, more than qualification, the focus is on skillsets.

IT and digital technology related employment : Also, the industry is increasingly adopting digital technologies and automation. This will lead to the generation of higher quality jobs. The new age technologies and digital innovations such as IoT, robotics, automation, artificial intelligence etc. will create employment opportunities in software development, product development, product engineering, R&D, programming, data intelligence, sales & marketing, and many other Electronic industry domains.

Employment creation in MSMEs : With more original equipment manufacturers catering to a rising demand, many companies would need support from component manufacturers, which will create job opportunities in Indian MSMEs. Owing to various changes in international relations, there is a higher possibility that more international enterprises would now be approaching India to significantly address their demand for electronic components.

Adapting to the ‘New Normal’ : The pandemic has ushered in a new normal and the existing infrastructure and organizational processes are proving to be non-resilient. With the pandemic taking the shape of endemic, the Electronics Manufacturing industry would need to consider a significant overhaul of the operations and processes to build in the core learnings of the ongoing crisis. This will lead to fewer people sharing the same workspace. The industries and offices may transform into 24X7 workplaces, with companies adopting roster & shift systems to maximize the use of physical infrastructures and other fixed assets. There will be increased focus on health, safety, and sanitization methods, and so on. All these will attract creation of some new job roles and increase in existing roles. Despite thrust on automation, there will be equivalent significant rise in demand of qualified people for many forms of job opportunities.

For India to be really Atmanirbhar, it is important to understand the vital role the Electronic Manufacturing and the overall sector has to play in nation building and in employment creation for the country’s future generations.

VIJAY KUMAR SACHDEVA
MD & CEO
Laxmi Remote India Pvt Ltd

Source: Magic Wand Media

As per the government projections, Indian electronics manufacturing is expected to set a record annual growth rate of approximately 30 percent in the next five years, which would create an estimated over 8 lakh jobs.

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