Notes

Industry & Infrastructure

3 min read

Manufacturing

Sectors

  • BioPharma Shakti
  • Inida Semiconductor Mission 2.0
  • Electronics Components Manufacturing Scheme
  • Rare Earth Magnet Initiative
  • Chemical parks (Plug & play)
  • Construction & Infrastructure Equipment

Smiling curve

Smiling Curve is a concept in global value chains showing that higher value is generated in upstream activities (R&D, design) and downstream activities (branding, marketing), while manufacturing and assembly in the middle create relatively lower value.

Entrepreneurial State

Info

Economic Survey 2025-26 called for india’s transition towards Entrepreneurial State.

Term borrowed from economist Mariana Mazzucato.

Survey also mentions “Strategic indispensability”.

Key features of Entrepreneurial State

  • policy making under uncertainty
    • eg. Investing in Green Hydrogen Mission despite future dominance uncertainty
  • structure risk - manage & distribute risk instead of avoiding it
    • eg. public funding for high risk project like Gaganyaan
  • Learn from experimentation, trial, feedback, correction
    • eg. Replication of best practices across districts under Aspirational District Programme
  • Institutional Forgiveness
    • accept reversible failures in good faith
  • bold missions and assessments

Barriers to entrepreneurial state

  • action punished, inaction safe
  • irreversibility creep
    • temporary measures eg. loan waiver become permanent
  • Retrospective scrutiny
  • poor coordination due to populist pressures

Asset Monetization

  • by Vijay Kelkar committee 2012

Challenges with asset monetization

  • difficult to assess real market worth of asset
  • asymmetrical performance in monetization across various sectors
  • operational constraints eg. in Railways, operation still carried out by Indian railway, thus limiting autonomy of pvt players
  • dispute b/w asset owner and private authority can delay projects, inc operational risk, discourage pvt participation
  • -ve public perception:
    • asset monetization misconstrued as privatization, causing resistance

Asset Monetization way forward

  • transparent valuation methodology & bidding process
  • enhanced centre state coordination
  • enhance policy & regulatory clarity
  • stakeholder collaboration : pvt sector, govt, civil society
  • continuous evaluation of assets and the returns it is generating
  • funding institutions eg. India Infrastructure Finance Company Limited or NABARD can play proactive role in developing structured bonds & innovative infra financing instruments

Electronics Industry

Challenges to indian electronics industry

  • heavy import dependence
    • from China, S.Korea, Vietnam
    • PCB, IC, Semiconductor devices
    • increases trade deficit, supply chain vulnerability
  • Cost competitiveness gap
    • manufacturing in india is 10-20% more expensive than China, Vietnam etc
    • due to high import duties on input, expensive raw material, high logistics cost
  • deficit in indigenous R&D
  • E-Waste crisis

Initiatives to boost electronics sector

govt has adopted a plug & play & incentive linked approach

  • PLI for mobile phone, IT hardware
  • SPECS : Scheme for promotion of manufacturing of electronic components & semiconductors
    • 25% financial incentive on capital expenditure
  • Modified Electronics Manufacturing Clusters (EMC 2.0): financial aid to create world class infra and common facility centers for electronics companies
  • Semicon India:
    • flagship program
    • financial support for semiconductor fabs, display fabs, DLI
  • National Policy on Electronics 2019: to position india as global ESDM Hub
  • 100% FDI automatic
  • customs duty exemptions of inputs for specific goods like microwave ovens
  • Social Welfare Surcharge waiver

District Mineral Foundation

  • CAG report flagged irregularities in usage of DMF Fund (Sept 2026)

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