1. Infrastructure Deficiencies
Inadequate infrastructure remains a major hurdle for Indian industries. Despite government initiatives, power outages and poor transportation networks increase operational costs.
2. Regulatory Hurdles
Complex regulatory frameworks and bureaucratic delays impede business operations. India ranks 63rd in the World Bank’s Ease of Doing Business 2022 report. This highlights the need to improve the regulatory bottlenecks and increase efficiency.
3. Skill Gap
There is a mismatch between available skills and industry requirements forces companies to invest heavily in training. Estimates show that about 51.25 per cent of the youth is deemed employable, according to Economic Survey 2024. In other words, about one in two are not yet readily employable, straight out of college.
4. Access to Finance
Access to finance remains challenging, particularly for MSMEs. The MSME sector contributes around 30% to GDP but struggles with high interest rates and stringent collateral requirements.
5. Technological Adoption
Slow technological adoption impacts competitiveness. India’s expenditure on R&D is only 0.65% of GDP, compared to the global average of 2.3%. This limits the integration of advanced technologies like automation and AI. There is even more concerning fact that most of the expenditure on R&D is done by the government whereas as private contribution is less than 30% of the total expenditure on it.
6. Environmental Concerns
Industries face pressure to adopt sustainable practices. There is a need for better environmental compliance and sustainable practices.
7. Market Volatility
Market fluctuations and global economic uncertainties, highlighted by the COVID-19 pandemic, pose significant risks. Effective risk management strategies are crucial for industrial stability and growth.
8. Labour Issues
Rigid labor laws and labor unrest affect productivity. Ongoing labor reforms aim to provide more flexibility and improve labor relations, but faster implementation is needed to support industrial growth.
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