Make In India – Burning Issues – Free PDF Download

• ‘Five years after its launch its appropriate time to take the stock of the progress made by ‘Make in India’.
• The initiative basically promises the investors – both domestic and overseas – a conducive environment to turn 125 crore population strong-India a manufacturing hub and something that will also create job opportunities.

Achievable Targets

• Target of an increase in manufacturing sector growth to 12-14% per annum over the medium term.
• An increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
• To create 100 million additional jobs by 2022 in manufacturing sector.
• Creation of appropriate skill sets among rural migrants and the urban poor for inclusive growth.
• An increase in domestic value addition and technological depth in manufacturing.
• Enhancing the global competitiveness of the Indian manufacturing sector.
• Ensuring sustainability of growth, particularly with regard to environment.

Three major objectives

• First- Manufacturing growth rate at 12-14 %
• Second-100 million jobs
• Third-increase manufacturing’s contribution to GDP to 25%

 Assessment

• Progress on the investment front: Slow growth The decline in gross fixed capital formation Increase in private sector’s savings decrease in investment
• Progress on the output growth front:
• Double-digit growth only in two quarters
• Below 3% for the most part
• Progress on the employment growth front

 Problems with the policy

• First- Too much reliance on foreign capital: The bulk of these schemes relied too much on foreign capital for investments and global markets for produce.
• Second-Lack of implementation: The policy implementers need to take into account the implications of implementation deficit in their decisions.
• Too-much ambitious goals
• Beyond capacity rate for the sector
• Overestimation of implementation capacity
• Dealing with too many sectors
• Lack of policy focus
• Lack of understanding of comparative advantages

Outcomes

• Foreign direct investment (FDI) has increased from $16 billion in 2013-14 to $36 billion in 2015-16 • FDIs in the service sector is $23.5 billion
• India’s share in the global exports of manufactured products remains around 2% which is far less than 18% share of China.
• ‘Make in India’ initiative led to radiant growth in the IT and manufacturing sectors.
• The implementation of Goods and Services Tax (GST) have made the industry as a whole much more transparent and accountable.
• Many companies have set up several manufacturing units throughout the country that produce electrical equipment and products such as bulbs, tube lights, wires and cables and others.
• First indigenously developed and manufactured Rotavirus vaccine, ‘Rotavac’, launched. 30 bioincubators and Biotech Parks supported.

Issues

• Investment from Shell Companies
• Low Productivity
• Small Industrial Units
• Complicated Labour Laws
• Infrastructure
• Transportation
• Red Tapism
• Insufficient Rules and Regulations

Steps Taken

• Government has taken steps to revise the FDI norms to make India more attractive for FDI.
• For export-oriented growth and to compete with Southeast Asian countries, especially in attracting FDIs, the reduction of the corporate tax .
• Indian government has to take more initiatives to create a conducive environment for the growth of industries and especially manufacturing systems. A targeted approach towards specific goal can be used to address the issue.

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