{"id":116723,"date":"2024-06-26T19:36:19","date_gmt":"2024-06-26T14:06:19","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=current-affairs&#038;p=116723"},"modified":"2025-02-13T15:59:29","modified_gmt":"2025-02-13T10:29:29","slug":"economic-development-by-policy-supported-services","status":"publish","type":"current-affairs","link":"https:\/\/pwonlyias.com\/stage\/current-affairs\/economic-development-by-policy-supported-services","title":{"rendered":"Economic Development By Policy- Supported Services"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Manufacturing-led development has been the traditional model for creating jobs and prosperity. But in the past few decades, the<\/span><b> services sector has grown faster than the manufacturing sector in many developing economies.<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As per the <\/span><b>World Economic Forum&#8217;s Future of Jobs Report 2020<\/b><span style=\"font-weight: 400;\">, by <\/span><b>2025, 85 million jobs may be displaced by automation, <\/b><span style=\"font-weight: 400;\">but <\/span><b>97 million new roles<\/b><span style=\"font-weight: 400;\">, primarily in emerging professions such as data analysis and artificial intelligence, may be created.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>About Economic Development<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/pwonlyias.com\/stage\/upsc-notes\/economic-development\/\">Economic development<\/a> has a lasting impact on citizens. Increased <a href=\"https:\/\/pwonlyias.com\/stage\/upsc-notes\/economic-growth\/\">economic growth<\/a> means more revenue for the government, which can be used for public services and infrastructure development.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Refers:<\/b><span style=\"font-weight: 400;\"> Economic Development is programs, policies or activities that seek to improve the economic well-being and quality of life for the citizens.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Economic Development Strategies: <\/b><span style=\"font-weight: 400;\">Though economic development priorities vary, economic development strategies often aim for common, positive results, such as:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Creating more jobs and more job variety<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Keeping businesses and getting new ones<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">A better quality of life<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Making and selling more local products<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Course<\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Manufacturing Sector in India<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Manufacturing is an integral and huge part of the economy. It involves processing and refining raw materials, such as ore, wood, and foodstuffs, into finished products, such as metal goods, furniture, and processed foods. Converting these raw materials into something more useful adds value.<\/span><\/p>\n<ul>\n<li><b>Contribution: <\/b><span style=\"font-weight: 400;\">The manufacturing sector in India contributes <\/span><b>16-17% of GDP.<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">It employs over<\/span><b> 27.3 million workers.\u00a0<\/b><\/li>\n<li><b>India is the third most sought-after manufacturing destination in the world <\/b><span style=\"font-weight: 400;\">and has the <\/span><b>potential to export goods worth US$ 1 trillion by 2030.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Achievement: <\/b><span style=\"font-weight: 400;\">Manufacturing exports have<\/span><b> registered the highest ever annual exports of US$ 447.46 billion with 6.03% growth during FY23 <\/b><span style=\"font-weight: 400;\">surpassing the previous year (FY22) record exports of US$ 422 billion.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">By 2030, the Indian middle class is expected to have the second-largest share in global consumption at 17%.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Target: <\/b><span style=\"font-weight: 400;\">India aims to increase the manufacturing sector&#8217;s contribution to <\/span><b>25% of the economy&#8217;s output by 2025 <\/b><span style=\"font-weight: 400;\">as per the goal of Make in India through the execution of several programmes and policies.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Challenges Faced by Developing Countries in Manufacturing Sector<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The <a href=\"https:\/\/pwonlyias.com\/stage\/upsc-notes\/manufacturing-industries\/\">manufacturing sector<\/a> is regarded as the backbone of both social and economic development. However, facing various following issues:<\/span><\/p>\n<ul>\n<li><b>Rise in Automation: <\/b><span style=\"font-weight: 400;\">Innovation in manufacturing has taken a predominantly <\/span><b>skill-biased form, reducing demand for workers with relatively low levels of education.\u00a0<\/b>\n<ul>\n<li><b>New technologies <\/b><span style=\"font-weight: 400;\">such as automation, robots and 3D printing <\/span><b>directly substitute physical capital for labour.\u00a0<\/b><\/li>\n<\/ul>\n<\/li>\n<li><b>Evolving Skill Demands:\u00a0<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">As <\/span><b>automation permeates manufacturing processes, the skills demanded of manufacturing workers is evolving. <\/b><span style=\"font-weight: 400;\">Jobs that require manual labour and repetitive tasks are declining.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Global Quality Competition: <\/b><span style=\"font-weight: 400;\">Firms in developing countries need to produce according to the exacting quality standards set by global value chains that<\/span><b> impacts unskilled labour <\/b><span style=\"font-weight: 400;\">and can easily be substituted for physical capital and skilled labour.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">While firms in developing countries have an incentive to use more labour-intensive techniques, <\/span><b>competing in the global marketplace requires employing production techniques<\/b><span style=\"font-weight: 400;\"> that cannot differ significantly from those used in the frontier economies.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Limited Growth: <\/b><span style=\"font-weight: 400;\">The rising skill- and capital-intensity of manufacturing means that formal segments of manufacturing in developing countries have<\/span><b> lost the ability to absorb significant amounts of labour.\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">They have effectively become \u2018enclave sectors,\u2019 not too different from mining, with <\/span><b>limited growth potential<\/b><span style=\"font-weight: 400;\"> and few positive effects on the supply side of the rest of the economy.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Need to Focus on Policy-Supported Services Sector<\/b><\/span><\/h2>\n<p><a href=\"https:\/\/pwonlyias.com\/stage\/udaan\/service-sector-in-india\/\"><b>Service sector <\/b><\/a><span style=\"font-weight: 400;\">is crucial because it contributes significantly to the country&#8217;s economic growth and GDP and with the current scenario, a policy-supported services sector is a need of the hour.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reason: <\/b><span style=\"font-weight: 400;\">Enhancing productivity in labour-absorbing services has become an essential priority, for reasons of both<\/span><b> growth and equity. <\/b><span style=\"font-weight: 400;\">Since the bulk of jobs will be in services, these jobs need to be productive enough to support income growth.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Action Followed: <\/b><span style=\"font-weight: 400;\">There is already a foundation of practice on what might be called <\/span><b>\u201cindustrial policies for services\u201d <\/b><span style=\"font-weight: 400;\">on which future efforts can build.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Challenges:<\/b><span style=\"font-weight: 400;\"> The conundrum is that it is<\/span><b> not known much about how to raise productivity in labour- absorbing services.<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">While <\/span><b>some services,<\/b><span style=\"font-weight: 400;\"> such as banking, infotech and business-process outsourcing (BPO) are both productively dynamic and tradable, they will <\/span><b>not be labour-absorbing for the same reason (skill-intensive services) <\/b><span style=\"font-weight: 400;\">that manufacturing is not.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The challenge is <\/span><b>to increase productivity in labour-absorbing services<\/b><span style=\"font-weight: 400;\"> such as retail, care and personal and public services, which has had limited success, in part because such services have never been an explicit target of productive development policies.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/store.pw.live\/govt-entrance-exams\/upsc-books?utm_source=SEO&#038;utm_medium=PW+Live&#038;utm_campaign=UPSC+CSE+Books\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Check Out UPSC CSE Books From PW Store<\/span><\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Service Sector in India<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The <a href=\"https:\/\/pwonlyias.com\/stage\/upsc-notes\/service-sector-in-india\/\">service sector<\/a> provides a wide range of services, from healthcare to finance, which adds value to people&#8217;s lives and contributes to the overall wealth of the nation.\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-116814 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-96-667d1ff751e37.webp\" alt=\"Economic Development\" width=\"501\" height=\"278\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-96-667d1ff751e37.webp 884w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-96-667d1ff751e37-300x167.webp 300w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-96-667d1ff751e37-768x427.webp 768w\" sizes=\"(max-width: 501px) 100vw, 501px\" \/><\/p>\n<ul>\n<li><b>Refers: <\/b><span style=\"font-weight: 400;\">The service sector is also known as the <\/span><b>tertiary sector.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">It is <\/span><b>one of the <a href=\"https:\/\/pwonlyias.com\/stage\/ncert-notes\/sectors-of-indian-economy-primary-secondary-tertiary\/\">three sectors of the economy<\/a><\/b><span style=\"font-weight: 400;\">, the other two being the <\/span><b>primary sector<\/b><span style=\"font-weight: 400;\"> (includes agriculture, forestry, mining, and fishing) and the <\/span><b>secondary sector<\/b><span style=\"font-weight: 400;\"> (includes manufacturing and construction).<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Includes:<\/b><span style=\"font-weight: 400;\"> India\u2019s services sector covers <\/span><b>a wide variety of activities<\/b><span style=\"font-weight: 400;\"> such as <\/span><b>trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, <\/b><span style=\"font-weight: 400;\">community, social and personal services, and services associated with construction.\u00a0<\/span><\/li>\n<li><b>Evolution &#038; Development: <\/b><span style=\"font-weight: 400;\">The <\/span><b>reforms of the 1990s<\/b><span style=\"font-weight: 400;\"> have been associated with the expansion of the service sector in India.\u00a0<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Midway through the 1980s, the service sector began to expand, but it took off in the 1990s when India started a series of economic reforms in response to a serious balance of payments issue.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Jurisdiction:<\/b>\n<ul>\n<li><b>Union List:<\/b><span style=\"font-weight: 400;\"> Telecommunications, postal, broadcasting, financial services (including insurance and banking), national highways, mining services.<\/span><\/li>\n<li><b>State List:<\/b><span style=\"font-weight: 400;\"> Healthcare and related services, real estate services, retail, services incidental to agriculture, hunting, and forestry.<\/span><\/li>\n<li><b>Concurrent List:<\/b><span style=\"font-weight: 400;\"> Professional services, education, printing and publishing, electricity.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Contribution: <\/b><span style=\"font-weight: 400;\">The service sector has<\/span><b> over 50%<\/b><span style=\"font-weight: 400;\"> contribution to<\/span><b> India\u2019s GDP<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">The service sector has emerged as the <\/span><b>highest employment generator <\/b><span style=\"font-weight: 400;\">with a 5-7% y-o-y growth in 2022.\u00a0<\/span><\/li>\n<li><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-116815 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-97-667d1ff7388f2.webp\" alt=\"Economic Development\" width=\"400\" height=\"424\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-97-667d1ff7388f2.webp 586w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-97-667d1ff7388f2-283x300.webp 283w\" sizes=\"(max-width: 400px) 100vw, 400px\" \/><span style=\"font-weight: 400;\">The share of the services sector accounted for<\/span><b> 57% of the total <a href=\"https:\/\/pwonlyias.com\/stage\/current-affairs\/growth-rates-of-gdp-gva\/#:~:text=In%20India%2C%20GVA%20is%20measured,generated%20during%20the%20production%20process.\">Gross Value Added (GVA)<\/a> in FY24<\/b><span style=\"font-weight: 400;\"> (April-September) as per advance estimates.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">As per data released by the Department for Promotion of Industry and Internal Trade (DPIIT), the services category <\/span><b>ranked first in FDI inflows.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">India\u2019s service exports stood at US$ 163.94 billion, whereas imports stood at US$ 88.89 billion in (April-September) 2023-24. The <\/span><b>services trade surplus for 2023-24 (April-September) is expected to be US$ 75.05 billion.<\/b><\/li>\n<\/ul>\n<\/li>\n<li><b>Future Prospects:<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Upcoming sectors are expected to contribute to <\/span><b>rapid expansion<\/b><span style=\"font-weight: 400;\"> of services sector in India:\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">By<\/span><b> 2025, the healthcare industry<\/b><span style=\"font-weight: 400;\"> is expected to reach<\/span><b> US$ 372 billion.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">By<\/span><b> 2025, <\/b><span style=\"font-weight: 400;\">India\u2019s<\/span><b> digital economy<\/b><span style=\"font-weight: 400;\"> is estimated to reach <\/span><b>US$ 1 trillion.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">By the end<\/span><b> of 2023,<\/b><span style=\"font-weight: 400;\"> India\u2019s <\/span><b>IT and business services sector<\/b><span style=\"font-weight: 400;\"> is expected to reach<\/span><b> US$ 14.3 billion with 8% growth.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">By<\/span><b> 2035, <a href=\"https:\/\/pwonlyias.com\/stage\/udaan\/artificial-intelligence-applications-regulations\/\">Artificial Intelligence (AI)<\/a><\/b><span style=\"font-weight: 400;\"> is expected to boost India\u2019s annual growth rate by 1.3% .<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><strong>Initiatives taken by the India to Promote Service Sector Growth<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To achieve growth in the service sector, following initiatives has been taken by India:<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-116816 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-98-667d1ff61c7d7.webp\" alt=\"Economic Development\" width=\"452\" height=\"303\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-98-667d1ff61c7d7.webp 455w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/06\/unnamed-98-667d1ff61c7d7-300x201.webp 300w\" sizes=\"(max-width: 452px) 100vw, 452px\" \/><\/p>\n<p>\u00a0<\/p>\n<ul>\n<li><b>Action Plan for Champion Sectors in Services:<\/b><span style=\"font-weight: 400;\"> To give focused attention to 12 identified Champion Services Sectors.<\/span><\/li>\n<li><b>Pradhan Mantri Jan Dhan Yojana (PMJDY):<\/b><span style=\"font-weight: 400;\"> As of November 9, 2022, the number of bank accounts opened under PMJDY scheme reached 47.39 crore and deposits in Jan Dhan bank accounts totalled Rs. 1.76 lakh crore (US$ 21.59 billion).<\/span><\/li>\n<li><b>Production-linked Incentive (PLI) Scheme:<\/b><span style=\"font-weight: 400;\"> In October 2021, the government launched a PLI scheme to boost manufacturing of telecom and networking products in India.\u00a0<\/span><\/li>\n<li><b>Mahatma Gandhi National Fellowship (MGNF): <\/b><span style=\"font-weight: 400;\">In October 2021, the government launched phase II of MGNF to empower students and boost skill development.<\/span><\/li>\n<li><b>PM Ayushman Bharat Health Infrastructure Mission: <\/b><span style=\"font-weight: 400;\">It was launched in October 2021 to strengthen the critical healthcare network across India in the next four to five years.<\/span><\/li>\n<li><b>100% FDI: <\/b><span style=\"font-weight: 400;\">The FDI limit for insurance companies has been raised from 49% to 74% and 100% for <\/span><b>insurance intermediates.<\/b><\/li>\n<li><b>Third phase of Pradhan Mantri Kaushal Vikas Yojana (PMKVY):<\/b><span style=\"font-weight: 400;\"> It was launched in January, 2021 tol focus on new-age and COVID-related skills.<\/span><\/li>\n<li><b>National Digital Health Mission (NDHM):<\/b><span style=\"font-weight: 400;\"> It was launched in 2020 to provide a unique health ID to every Indian and revolutionize the healthcare industry by making it easily accessible to everyone in the country.\u00a0<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Over the next 10 years, the <\/span><b>National Digital Health Blueprint<\/b><span style=\"font-weight: 400;\"> can unlock the incremental economic value of<\/span><b> over US$ 200 billion<\/b><span style=\"font-weight: 400;\"> for the healthcare industry in India.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>National Broadband Mission: <\/b><span style=\"font-weight: 400;\">The government of India has launched the National Broadband Mission to provide Broadband access to all villages by 2022.<\/span><\/li>\n<li><b>IGnITE Programme: <\/b><span style=\"font-weight: 400;\">It was launched in December 2020 to encourage high-quality training and technical education.\u00a0<\/span>\n<ul>\n<li aria-level=\"2\"><span style=\"font-weight: 400;\">&#8216;IGnITE&#8217; aims to develop highly trained technicians based on the German Dual Vocational Educational Training (DVET) model. By 2024, this programme aims to upskill about 40,000 employees.<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Germany&#8217;s dual vocational education and training system is highly regarded worldwide for its <\/span><b>emphasis on practical training and close collaboration between industry and educational institutions.<\/b><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To enhance India&#8217;s commercial services exports, s<\/span><b>hare in the global services market from 3.3% and permit a multi-fold expansion in the GDP,<\/b><span style=\"font-weight: 400;\"> the government is also making significant efforts in this direction.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>PM Gati Shakti:<\/b><span style=\"font-weight: 400;\"> National Master Plan for multimodal connectivity infrastructure project.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bharatmala Project: <\/b><span style=\"font-weight: 400;\">To Improve connectivity in North East India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Start-up India: <\/b><span style=\"font-weight: 400;\">To catalyse Startup culture in India.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc\/pw-only-ias?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Classes<\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><strong>Way Forward<\/strong><\/span><\/h2>\n<p><b>Four strategies for expanding productive employment in services<\/b><span style=\"font-weight: 400;\"> that create the most jobs in developing countries are as follows:<\/span><\/p>\n<ul>\n<li><b>Focus on Large and Productive Firms:\u00a0<\/b>\n<ul>\n<li><b>Incentivize Expansion:<\/b><span style=\"font-weight: 400;\"> Encourage large, productive firms to expand employment directly or through local supply chains.\u00a0<\/span><\/li>\n<li><b>Target Firms<\/b><span style=\"font-weight: 400;\">: Include <\/span><b>large retailers, platforms<\/b><span style=\"font-weight: 400;\"> such as ride-sharing services, or even <\/span><b>manufacturing exporters <\/b><span style=\"font-weight: 400;\">(with potential to generate upstream linkages with service providers).<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Focus on Small Enterprises:\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Enhance Capabilities<\/b><span style=\"font-weight: 400;\">: The next strategy requires to focus on small enterprises <\/span><b>(which constitute the bulk of firms in most developing countries) <\/b><span style=\"font-weight: 400;\">and aims to enhance their productive capabilities through the provision of specific public inputs.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">These inputs could be <\/span><b>management training, loans or grants, customised worker skills, specific infrastructure or technology assistance.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Need-based Policy Approach: <\/b><span style=\"font-weight: 400;\">Given the heterogeneity of such firms, ranging from micro-enterprises and self-owned proprietorships to midsize companies, policies in this domain require<\/span><b> a differentiated approach that responds to their distinct needs.\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Moreover, given the numbers involved,<\/span><b> policies often also require a suitable mechanism for selecting<\/b><span style=\"font-weight: 400;\"> among the most promising firms, since most are unlikely to become dynamic and successful.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Focus on the Provision of Digital Tools and New Technologies:\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Compliment low-skilled labour<\/b><span style=\"font-weight: 400;\">: There is a need to focus on the provision, to <\/span><b>workers directly or to firms, <\/b><span style=\"font-weight: 400;\">of <\/span><b>digital tools or other forms of new technologies<\/b><span style=\"font-weight: 400;\"> that explicitly complement low-skill labour.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Expand Task Range:<\/b><span style=\"font-weight: 400;\"> It is to<\/span><b> enable less educated workers<\/b><span style=\"font-weight: 400;\"> to do (some of) the jobs traditionally reserved for more skilled professionals and to increase the range of tasks they can perform.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reshaping of Human Resources:\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Vocational Training:<\/b><span style=\"font-weight: 400;\"> This strategy also focuses on <\/span><b>less-educated workers and combines vocational training <\/b><span style=\"font-weight: 400;\">with \u2018wrap-around\u2019 services, a range of additional assistance programmes for job seekers to <\/span><b>enhance their employability, retention and eventual promotion.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Employer Collaboration:<\/b><span style=\"font-weight: 400;\"> Modelled after Project Quest, a US-based initiative, and other similar sectoral workforce development schemes, these training programmes typically work closely with employers, both <\/span><b>to understand their needs and to reshape their human-resource practices to maximise employment potential.<\/b><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><strong>Conclusion<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">With the rise in automation in the manufacturing landscape, while job displacement is a serious concern, the real success in a <\/span><b>services-oriented development strategy <\/b><span style=\"font-weight: 400;\">will require <\/span><b>greater ambition, continuous experimentation and the implementation of a very wide range of programmes.<\/b><\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<th style=\"border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle; width: 100%;\">\n<h3><span style=\"font-size: 16pt; color: #000000;\"><strong>India\u2019s march towards a $5 trillion economy by 2025 and role of Service Sector<\/strong><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">India is one of the fastest growing major economies and its strengths are indicative of the potential of India to <\/span><b>achieve a USD 5 trillion economy by 2025.\u00a0<\/b><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">The current structure of the economy and the emerging dynamics provide us grounds to target achieving <\/span><b>1 trillion dollars from agriculture and allied activities,<\/b> <b>1 trillion from manufacturing and 3 trillion from services.<\/b><\/span><\/li>\n<\/ul>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u00a0<\/p>\n<table style=\"width: 100.126%;\">\n<tbody>\n<tr>\n<td style=\"width: 138.013%; text-align: center; border-style: solid; border-color: #000000;\" colspan=\"2\"><span style=\"font-size: 18pt;\"><b>Must Read<\/b><\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 50.5357%; text-align: center; border-style: solid; border-color: #000000;\"><a href=\"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/\" target=\"_blank\" 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But in the past few decades, the services sector has grown faster than the manufacturing sector in many developing economies.<\/p>\n","protected":false},"author":11,"featured_media":116831,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"tags":[],"paper-wise":[2089],"subject":[2100],"acf":[],"_links":{"self":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/116723"}],"collection":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs"}],"about":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/types\/current-affairs"}],"author":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/comments?post=116723"}],"version-history":[{"count":9,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/116723\/revisions"}],"predecessor-version":[{"id":116819,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/116723\/revisions\/116819"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media\/116831"}],"wp:attachment":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media?parent=116723"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/tags?post=116723"},{"taxonomy":"paper-wise","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/paper-wise?post=116723"},{"taxonomy":"subject","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/subject?post=116723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}