MAKE IN INDIA
“I tell the world, ‘Make in India’. Sell anywhere but manufacture here. We have the skill and talent for it andadditional ways must be found to curb imports and export Indian goods to the world. From electrical to electronics, come ‘Make in India’, from chemicals to pharma, come make in India, from auto to value-addition, come make in India. Paper or plastic, come make in India. Satellites or submarines, come make in India. We in India have the strength. I extend the invitation to you,” said Modi during his Independence Day address from the ramparts of Red Fort.
Since then, a lot has come up in the front to support this vision. The recent visit of US President, Barack Obama, has also unvealed a lot of hope coming in for the same. But before we get into the practical aspects of where India has reached so far, let us understand the vision behind “MAKE IN INDIA.”
The Make in India campaign was officially launched on 25 Sep, 2014 by Prime Minister, Mr. Narendra Modi. However the first mention of the keyphrase, as mentioned above, was made in his maiden Independence Day address. It is Modi’s flagship campaign intended to boost the domestic manufacturing industry and attract foreign investors to invest into the Indian economy.
The launch date had been carefully selected as it came right after the successful insertion of Mangalyaan into the Martian orbit. It was not a coincidence that it also came just a day ahead of the Prime Minister’s maiden US visit. Anticipated to enhance India’s attractiveness as an investment destination, the launch ceremony was held at the Vigyan Bhavan in New Delhi. Leading entrepreneurs and the CEOs of about 3000 companies from across 30 countries were invited to attend the launch.
Manufacturing currently contributes just over 15% to the national GDP. The aim of this campaign is to grow this to a 25% contribution as seen with other developing nations of Asia. The scope of the Indian manufacturing sector is tremendous however lack of political will, entrepreneurial myopia and gross inefficiency prevented success in real terms. Now is the time to encash it and after the resounding success of the Vibrant Gujarat Summit and the upcoming partnership ties with US, there is no reason for us to have any doubts whatsoever. In the process of transforming India into a manufacturing hub preferred around the globe, there will be a plethora of jobs which will be generated in addition to the much awaited foreign direct investment.
At the launch ceremony, the Prime Minister called for all those associated with the campaign, especially the entrepreneurs and the corporates, to step and discharge their duties as Indian nationals by First Developing India and for investors to endow the country with foreign direct investments. Modi also promised that his administration would aid the investors by making India a pleasant experience and that his government considered overall development of the nation an article of faith rather than a political agenda. He also laid a robust foundation for his vision of a technology-savvy Digital India as complementary to Make In India. He stressed on the employment generation and poverty alleviation that would inevitably accompany the success of this campaign.
There are 25 priority sectors which have been identified and which will be promoted by the government of India because in these sectors likelihood of FDI is the highest. During the campaign launch, Modi said that the development of these sectors would ensure that the world shall readily come to Asia, particularly to India where the availability of both democratic conditions and manufacturing superiority make it the best destinations, especially when combined with the effective governance intended by his administration.
- Food Processing.
- Renewable Energy.
- Automobile Components.
- IT and BPM.
- Roads and highways.
- Media and Entertainment.
- Textiles and garments.
- Thermal Power.
- Oil and Gas.
- Tourism and Hospitality.
- Defence manufacturing.
- Electrical Machinery.
- Electronic Systems.
During the launch initiative, Narendra Modi gave an official status to ‘Make in India’ slogan and said, “People are talking about FDI but I see things differently. FDI is also a responsibility for the people of India. The Make in India logo is derived from the Ashoka Chakra. The lion in the logo stands for strength and power while the wheels are a sign of development and progress.”
“Make-in-India is a lion’s step”, said Modi. The logo is the silhouette of a lion on the prowl, made entirely of cogs, symbolising manufacturing, strength and national pride. The national emblem, Ashok Chakra, also has four lions. In Indian folklore, the lion denotes the attainment of enlightenment, besides representing power, courage, pride and confidence.
The lion logo adorns the brand new website - makeinindia.com - for the campaign and all its brochures. The website is a ready reckoner for data on 25 sectors that are looking to attract companies to India. It also lists new initiatives of the government, facts on Foreign Direct Investment and intellectual property rights. The site gives contact details for a new investor facilitation cell and invites companies to fill a form where they can simply explain their proposal and potential investment.
Shackles of Past
The Central Government will have to revive the manufacturing sector which is witnessing stagnancy for the last many years. UPA’s policy paralysis has been one of the prime cause for this catastrophic condition. Though more than 50 per cent of Indian population is engaged in farming but it only contributes to 14 per cent of the GDP. Even the Services Sector which contributes to 60 per cent of the economy, employs only 27 per cent of the available workforce. These are the shackles of the past which Modi has inherited from the decade long UPA regime. That is why eyeing export-based manufacturing, infrastructure building and urbanisation of cities is top on Modi’s agenda.
The government needs to generate large-scale jobs. At present, the expected volume of unemployed youth stands at more than 120 million. The Census report reveals that most of the States have approximately the same proportion of households with some member unemployed as the national average. Jammu and Kashmir has about 48 per cent households with unemployed persons, Bihar has 35 per cent, Assam – 38 per cent, West Bengal – 54 per cent, Jharkhand – 42 per cent, Odisha – 39 per cent and Kerala has 42 per cent.
However, States with better conditions are Maharashtra with 14 per cent, Gujarat has 12 per cent, Andhra Pradesh – 18 per cent, Karnataka – 14 per cent and Tamil Nadu has 18 per cent. These are States with high degrees of industrialisation and of urbanisation.
Talking about creating job opportunities through this campaign, Narendra Modi said that we have to create opportunities of employment. If the poor have jobs, the purchasing power of families will increase. “We have to increase manufacturing and at the same time ensure that the benefits reach the youth of our nation.”
In the 1960s, the entrepreneurial movement began in India in a small way with the establishment of NISIET (National Institute of Small Industry Extension Training) for promoting and encouraging entrepreneurship amongst the people of India. India has taken many steps since then in building up a startup ecosystem. The Make in India campaign has promised some enterprise-oriented policies as a result of which the recent financial budget presented by the Finance Minister, Arun Jaitley appears to be very promising for young entrepreneurs. INR 10,000 crore startup fund will be set aside for providing risk capital for start-ups; boosting incubation centres for handholding and scaling-up enterprise productivity. Among others is altering the legal bankruptcy framework to allow for easy exit for sick and ailing firms. Rural entrepreneurs and scheduled caste entrepreneurs will get new and distinct corpuses to boost income and employment generation activities.
Missing from the list are any policies to encourage women entrepreneurs in manufacturing. This is despite the fact that women hold a fair stake (14% of registered enterprises, 9% unregistered) among MSMEs. Two highlighted industries in the Make in India campaign—garment and food processing—are popular among women entrepreneurs. A significant share of women’s entrepreneurship takes place in garment manufacturing, with nearly half of all women-owned enterprises in this sector. With another 10% of women-owned enterprises in food processing, there is significant scope to boost women’s entrepreneurship. Women’s participation in manufacturing at the moment comes in just under 15% in all sectors, which is considerably low and the potential remains unexplored.
Studies show that women have a tougher time manoeuvring and finding success in manufacturing ecosystems compared with traditional crafts, retail and knowledge-based services. Women lack business role models in manufacturing and with no peer network to learn from, they slide into sectors where they have seen other women achieve success. Creating incentives for women in manufacturing needs to complement strategies to boost manufacturing.
The Flip Side
No matter how great a concept might be, it will have it’s own share of criticism too. The topmost of these criticisms is leveled against the incumbent government. It has been felt that the government does not walk its talk.
Labour reforms and policy reforms which are fundamental for the success of the Make In India campaign have not yet been implemented. A number of layoffs in companies such as Nokia India cast long shadows over the campaign. A number of technology based companies have not been enthused by the campaign launch and have professed to continue getting their components manufactured by China. The campaign has focused largely on getting more multinational corporations in the market through increased foreign direct investment. Ironically, little has been said about what the role of Indian micro, small and medium enterprises (MSMEs) should be in this. Nearly 8% of manufacturing today is from the SME sector. While there are provisions to stimulate the growth of MSMEs, there are no large policy shifts in the way they are being treated.
To accomplish its goal of 15 per cent manufacturing growth annually, there is need to quickly address a few issues which have been posing problems for the business community and hurting investor sentiment. The World Bank has ranked India 134th out of 189 countries in ‘ease of doing business’ category. China ranks at 96. India performs really bad in various categories involving taxes, construction permits, etc. But keeping these factors aside, let us discuss the achievements being made so far.
First and foremost, the top of the line conquest is the statement of US President in which he has drawn a parallel between Made in India and Made in USA. A big feet was the Indo-US CEO Meet in which Obama’s talk was so heartening for all die hard Make in India fans.
“Indian diaspora havr created incredible companies, values all over the world. The good news is that our (Indo-US) trade in the last few years has increased by 60 percent. Two percent of American exports comes from India. We do a USD 100 billion trade with India every year. More trade and investment will benefit people of India and US. Fortunes of India and America are inextricably linked.”
Indian Renewable Energy Development Agency (IREDA) has signed a $1-billion loan agreement with the US Exim bank and this will also be extended to US solar cell manufacturing companies that will export to India. All investment commitments made by the governments of Japan, Australia, Korea and Russia in wake of the Make in India campaign and the subsequent signing of the agreements bear a testimony to the fact that never before in the history of India has there ever been such a manmoth turn around of the world’s attention to the economic potential of our country.
Quoting Swami Vivekananda,
”Take up one idea. Make that one idea your life – think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success.”
Modi’s dream is the country’s dream – dream of a billion plus people. However, to make this dream a reality, the government will need to assure the world that aggressive reforms are high on agenda and if the government succeeds in attracting FDI through the ‘Make in India’ initiative, then, it will be a turning point not just for the economy but will also transform millions of lives for generations to come.