Thrust on Make in India
Make in India is an initiative by the Government of India to encourage companies to manufacture in India and incentivize dedicated investments into manufacturing. The policy approach was to create a conducive environment for investments, develop a modern and efficient infrastructure, and open up new sectors for foreign capital. The initiative targeted 25 economic sectors for job creation and skill enhancement, and aimed “to transform India into a global design and manufacturing hub.”
Prime Minister Narendra Modi launched the Make in India initiative on September 25, 2014, with the primary goal of making India a global manufacturing hub, by encouraging both multinational as well as domestic companies to manufacture their products within the country. Led by the Department of Industrial Policy and Promotion, the initiative aims to raise the contribution of the manufacturing sector to 25% of the Gross Domestic Product (GDP) by the year 2025 from its current 16%. Make in India has introduced multiple new initiatives, promoting foreign direct investment, implementing intellectual property rights and developing the manufacturing sector.
It targets 25 sectors of the economy which range from automobile to Information Technology (IT) & Business Process Management (BPM), the details of each can be viewed on the official site (www.makeinindia.com).
“Make in India” had three stated objectives:
- To increase the manufacturing sector’s growth rate to 12-14% per annum;
- To create 100 million additional manufacturing jobs in the economy by 2022;
- To ensure that the manufacturing sector’s contribution to gdp is increased to 25% by 2022 (later revised to 2025).
Ease of Doing Business
India jumped to 63rd place out of 190 countries in the world Banks’ 2019 Ease of Doing Business Index from 130th in 2016. In February 2017, the government appointed the United Nations Development Programme (UNDP) and the National Productivity Council “to sensitise actual users and get their feedback on various reform measures.” As a result, now there is competition among the states of India to improve their current ranking on the ease of doing business index based on the completion percentage scores on 98-point action plan for business reform under Make in India initiative. Currently Andhra Pradesh, Telangana, Haryana, Odisha, Chhattisgarh and West Bengal (44.35%) are top six states (c. Feb 2018).
- New Processes: The government is introducing several reforms to create possibilities for getting Foreign Direct Investment (FDI) and foster business partnerships. Some initiatives have already been undertaken to alleviate the business environment from outdated policies and regulations. This reform is also aligned with parameters of World Bank’s ‘Ease of Doing Business’ index to improve India’s ranking on it.
- New Infrastructure: Infrastructure is integral to the growth of any industry. The government intends to develop industrial corridors and build smart cities with state-of-the-art technology and high-speed communication. Innovation and research activities are supported by a fast-paced registration system and improved infrastructure for Intellectual Property Rights (IPR) registrations. Along with the development of infrastructure, the training for the skilled workforce for the sectors is also being addressed.
- New Sectors: ‘Make in India’ has identified 25 sectors to promote with the detailed information being shared through an interactive web-portal.1 The Government has allowed 100% FDI in Railway2and removed restrictions in Construction.3 It has also recently increased the cap of FDI to 100% in Defense and Pharmaceutical.
- New Mindset: Government in India has always been seen as a regulator and not a facilitator. This initiative intends to change this by bringing a paradigm shift in the way Government interacts with various industries. It will focus on acting as a partner in the economic development of the country alongside the corporate sector.
Since the launch of Make in India in September 2014, FDI inflows of USD 77 billion including a equity inflows of USD 56 billion has been received for the period October 2014 to March 2016. This represents about a 44% increase in FDI Equity inflows over the same corresponding period.
Make in India Schemes
Several schemes were launched to support the Make in India programme. These schemes are discussed below:
This mission aims to skill 10 million in India annually in various sectors. Make in India to turn into a reality, there is a need to upskill the large human resource available. This is important because the percentage of formally skilled workforce in India is only 2% of the population.
The main idea behind this programme is to build an ecosystem that fosters the growth of startups, driving sustainable economic growth, and creating large-scale employment.
This aims to transform India into a knowledge-based and digitally empowered economy. To know more about Digital India, click on the linked page.
Pradhan Mantri Jan Dhan Yojana (PMJDY)
The mission envisages financial inclusion to ensure access to financial services, namely banking savings & deposit accounts, remittances, credit, insurance, pension in an affordable manner. Click the linked article to know more about Pradhan Mantri Jan Dhan Yojana (PMJDY).
This mission aims to transform and rejuvenate Indian cities. The goal is to create 100 smart cities in India through several sub-initiatives.
AMRUT is the Atal Mission for Rejuvenation and Urban Transformation. It aims to build basic public amenities and make 500 cities in India more livable and inclusive.
Swachh Bharat Abhiyan
This is a mission aimed at making India more cleaner and promoting basic sanitation and hygiene. For more information on Swachh Bharat Mission, click on the linked article.
This scheme aims at developing ports and promoting port-led development in the country. Read more on the Sagarmala Project in the linked article.
International Solar Alliance (ISA)
The ISA is an alliance of 121 countries, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn. This is India’s initiative aimed at promoting research and development in solar technologies and formulating policies in that regard.
AGNII or Accelerating Growth of New India’s Innovation was launched to push the innovation ecosystem in the country by connecting people and assisting in commercializing innovations.
The Make in India campaign has had several positive developments for the country. Below are some more benefits that have been derived from this mission.
- Generating employment opportunities.
- Increasing the GDP by expanding economic growth.
- When FDI inflows become more, the rupee will be strengthened.
- Small manufacturers will get a thrust, particularly when investors from abroad invest in them.
- When countries invest in India, they will also bring with them the latest technologies in various fields.
- Due to the various initiatives taken under the Mission, India has moved up the ranks in the EoDB index.
- Setting up manufacturing centres and factories in rural areas will foster the development of these areas as well.