Model Answer

GS3

Economy

15 marks

Industrial production is an important indicator of the health of an economy. Examine the role of industrial production in promoting sustainable economic growth in India. Suggest measures to sustain industrial growth in the long run.

India's Index of Industrial Production (IIP) grew by 7.3% in June 2026, the fastest growth in nearly two years, driven by manufacturing, electricity and capital goods. The trend reflects improving industrial activity and investment sentiment.

Role of industrial production

Generates employment by creating productive jobs in manufacturing and allied sectors. eg: Electronics manufacturing under the PLI Scheme.
Drives economic growth through higher output, investment and value addition.
Promotes structural transformation by shifting labour from agriculture to manufacturing.
Enhances export competitiveness by integrating Indian industries with Global Value Chains. eg: India's growing mobile phone exports.
Encourages capital formation by increasing investment in productive assets. eg: Strong growth in capital goods production in the latest IIP data.
Accelerates technological progress through automation, innovation and Industry 4.0 adoption.
Creates multiplier effects by supporting logistics, finance, transport and other services.

Measures to sustain industrial growth

Strengthen manufacturing competitiveness through the National Manufacturing Mission, Make in India and PLI Schemes.
Improve logistics and infrastructure through PM Gati Shakti, industrial corridors and the National Logistics Policy.
Enhance MSME productivity through easier credit, technology upgradation and digitalisation. eg: Raising and Accelerating MSME Performance (RAMP) Programme.
Promote innovation and skilling through the Skill India Mission and greater investment in R&D, in line with the recommendations of the National Manufacturing Competitiveness Council (NMCC).
Deepen integration with Global Value Chains through export-oriented manufacturing and quality FDI.
Encourage sustainable industrialisation through green manufacturing and the National Green Hydrogen Mission.

Sustained industrial production is essential for achieving higher growth, quality employment and global competitiveness. A resilient and technology-driven manufacturing sector will be central to India's journey towards Viksit Bharat 2047.

8.5/15

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