Updated February 5, 2022
Regional resource-based manufacturing means developing industry that can easily utilize the raw material or resource available locally. Local resource-based manufacturing will utilize the raw materials present nearby the regional Industry, hence will create the employment. In a way, regional resource-based manufacturing can avail the advantages from the local by employing them for basic jobs and menial jobs – housekeeping, security, clerical, loading/ down loading materials, admin and infrastructure maintenance from cost, availability and employee retention perspectives. No doubt, increase of high degree of Industrialization would create the employment in India. It has been observed that some of the areas are growing at a faster rate due to the locational advantage with the increase in industrialization whereas some are lagging behind. Example- Employment has been generated in a great number by the Tata Steel for locals during the 50s and 60s and even 70s. It is the gratitude of the Tata Steel for the whole city of Jamshedpur. Imagine the amount of direct and indirect employment it would have generated. If the employment generation is being done on a regional basis, then it will reduce the income gap between urban and rural and thereby reducing the distress migration in the country.
Unlike other manufacturing utilizing resources imports from the other country, regional resource-based manufacturing utilizes locally available raw materials. Ex- Copper ore extraction in the particular region will promote employment of miners and labourers of that region. However, employment generation can be promoted with taking certain steps in the on-going industry.
Cost Cutting- The proximity of raw materials and manufacturing unit will help in reducing the cost of transportation. This will help in hiring more capable employment from that particular region.
Ex- Millers in Punjab buy rice from local farmers, thereby providing ready market.
Expertise- Expertise could be developed in the region itself in the field of manufacturing which would help create more employment.
Supply Chain- Development of supply chain in the area creates more employment opportunities because a supply chain is the network between company and its suppliers and distribute a specific product to the final buyer. In this network, it includes different activities, people, entities, information and resources. So, the regional resource-based manufacturing creates ancillary industries, hence will create more employment.
Focus on specialisation- With primary focus on particular type of resource, people with specific skill set are required to work in such industries. This will create demand for people with that particular ability to get employment. Ex: Alcohol distillery and manufacturing.
Creating ancillary Industries- When a particular kind of industry is set up with specific resource, various small industries in the form of MSME’s are established that act as suppliers of smaller items to the main Industry. These small industries will help in promoting more employment. Besides this, there is secondary employment opportunists through eateries, hostels and shops that come up to cater to the people associated with the industry, and through ancillary units supplying to the main industry. These all would create more employment.
Ex: Gurugram in Haryana is dedicated to automobile manufacturing. The presence of automobile manufacturing has enabled smaller industries to develop, which supply smaller items like nuts, axles, cranks etc to the large Industry. Or Dairy industry in Gujarat provided employment to lakh of dairy farmers in Gujarat.
The industry also helps in creating opportunities for the entrepreneurship and ancillary industry in secondary and tertiary sectors. But in an ongoing industry the scope for increase in giving employment to the locals will be limited. The recruiting of employ will plateau as the industry stabilizes in its operations. Only business expansion in the same area to cater to new product lines or increment in the demand of the same products can mean increase the local employment. Even, region having specific resources has lack of adequate infrastructure, skills amongst the people etc. So, there are some challenges for regional-based manufacturing such as:
(a) Like Jharkhand, Chhattisgarh has abundant of mineral resources, but they don’t have adequate infrastructure — mainly roads and power — that has been a major roadblock.
(b) Lack of skills amongst people in these manufacturing industries.
(c) MSME sector which will have lion’s share in such a strategy are already facing challenges related to marketing, credit, growth, and non-availability of suitable technology for manufacturing, etc.
In this regard, State and the Union government have come up with various strategies for harnessing the regional manufacturing potential-
(a) Orissa has also launched ‘Odisha Industrial Development Plan: Vision 2025’ the with focussed attention on five sectors that aim to attract investments of Rs. 2.5-lakh crore and generate direct and indirect employment opportunities for 30 lakh people.
(b) UP government’s One District, One Product scheme seeks to promote traditional industries synonymous with their respective districts to spur the local economy and create jobs.
(c) North East Industrial Development Scheme (NEIDS) encourages micro, small, and medium enterprises (MSMEs) to set up in the north-east region.
(d) Forest-based industries and Tribal Products are being encouraged in different states because of its ability to solve the problem of unemployment and poverty.
(e) Different states and regions harbour GI tagged products that could be manufactured locally and marketed globally.
Regional resource-based manufacturing is good to increase employment and securing a balanced and coordinated development of the decentralized manufacturing economy in each region. This overall can helps in the development of the country.