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Account for the failure of the manufacturing sector in achieving the goal of labour-intensive exports rather than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports. (150 words)

Labour-intensive exports involve a higher proportion of human labour in the production process, while capital-intensive exports rely more on machinery and equipment. Despite its potential, the manufacturing sector in India has struggled to achieve the goal of labour-intensive exports, focusing instead on capital-intensive sectors like auto parts, chemicals, software, and pharmaceuticals.

Reasons for the failure of labour-intensive exports:

  • Slow movement of workers from agriculture to export-oriented manufacturing due to skill requirements.
  • Lack of ease of doing business in India, including labour market rigidities, tax uncertainties, and impediments to entrepreneurial growth.
  • High initial investment costs and maintenance costs in capital-intensive industries.
  • India’s competitive advantage in labour-intensive sectors like apparel, textiles, and footwear has not been fully utilized.

Measures for promoting labour-intensive exports:

  • Ease labour law regulations to encourage flexibility and reduce complexity.
  • Improve the ease of doing business by addressing tax uncertainties and promoting entrepreneurial growth.
  • Invest in skill development programs to equip workers with the necessary skills for labour-intensive industries.
  • Encourage the growth of labour-intensive sectors by providing incentives and support.
  • Focus on export-led growth by leveraging India’s comparative advantage in labour.
  • Address the issue of an overvalued rupee, which discourages the export of price-sensitive labour-intensive goods.

In conclusion, India’s manufacturing sector has not fully capitalized on its potential for labour-intensive exports. To address this, the country needs to implement measures that ease labour laws, improve the business environment, invest in skill development, and support the growth of labour-intensive sectors. By doing so, India can create more job opportunities and foster inclusive economic growth.

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