Make in India initiative to achieve transform India from highly potential market to the manufacturing powerhouse. Its mantra is "Zero Defect and Zero Effect"

1. Make in India
Today’s Challenges and Tomorrow’s Opportunities

2. About Make in India
 An initiative by the Government of India, launched on 25th September 2014.
 The main objectives are:
 To transform India from highly potential market to the manufacturing powerhouse.
 Creating millions of job opportunities and skill enhancement in 25 sectors of the
economy.
 This calls for a major reform in economical, political, technological, cultural
and administrative fabric of the country.
 Mantra of this initiative is "Zero Defect, Zero Effect”.

3. Contents
 A Study Tour of China
 Major economic reforms
 Growth Phase
 Decline Phase
 Adverse Effects
 Challenging the Change
 Make in India – Nation’s Perspective
 Current Status of an Indian Defence Sector
 Rise of Private Firms
 Challenges and Opportunities in Indian Defence Sector
 Make in India - BEL’s Perspective
 Story of the First DPSU
 Initiatives Taken by BEL
 Initiatives to be taken by BEL
 Conclusion

4. A Study Tour of China
 Before Reforms (prior to 1979):
 Centrally planned or command economy, under the leadership of Chairman Mao Zedong.
 Nearly three-fourths of industrial production was produced by centrally controlled,
state-owned enterprises (SOEs), according to the centrally planned output targets.
 Private enterprises and foreign-invested firms were generally barred.
 According to economists, China’s real GDP grew between average annual rates of 4.4% to
6.7% from 1953 to 1978.
 Reforms in Action (After 1979):
 Moving away from Soviet-style economic policies to free market principles.
 Opening up trade and investment with the West.
 As Deng Xiaoping, the architect of China’s economic reforms, put it: “Black cat, white
cat, what does it matter what colour the cat is as long as it catches mice?
 The government established four special economic zones along the coast for the purpose
of attracting foreign investment, boosting exports, and importing high technology
products into China.

5.  Reforms in Action (After 1979):
 In addition, citizens were encouraged to start their own businesses.
 Additional coastal regions and cities were designated as open cities and
development zones, which allowed them to experiment with free market reforms
and to offer tax and trade incentives to attract foreign investment.
 Removing trade barriers and encouraged greater competition, attracted FDI
inflows.
 Policy of “crossing the river by touching the stones.”
A Study Tour of China (Continued…)

6. The cause-and-effect analysis of Reforms
 After the introduction of economic reforms, China’s economy has grown
substantially faster than during the pre-reform period.
 From 1979 to 2014, China’s annual real GDP averaged nearly 10%.

7. Factors of rapid economic growth
 Economists generally attribute much of China’s rapid economic growth to two
main factors:
 Large-scale capital investment (financed by large domestic savings and foreign
investment)
 China has historically maintained a high rate of savings. When reforms were initiated in 1979,
domestic savings as a percentage of GDP stood at 32%.
 Rapid productivity growth:
 Reallocation of resources to more productive uses, especially in sectors that were formerly
heavily controlled by the central government, such as agriculture, trade, and services.
 Agricultural reforms boosted production, freeing workers to pursue employment in the more
productive manufacturing sector.
 China’s decentralization of the economy led to the rise of non-state enterprises (such as private
firms), which tended to pursue more productive activities than the centrally controlled SOEs and
were more market-oriented and more efficient.
 Local and provincial governments were allowed to establish and operate various enterprises
without interference from the government.
 In addition, FDI in China brought with it new technology and processes that boosted efficiency.
 In 2014, China has emerged as the world’s largest economy (on PPP basis) and
manufacturer.

8. China’s Current Status:
 The global economic slowdown, which began in 2008, affected the Chinese
economy. The International Monetary Fund (IMF) projects that China’s real
GDP growth will slow to 6.8% in 2015 and to 6.3% in 2016.
 China’s huge population and relatively low wage rates gave it a significant
competitive advantage when economic reforms and trade liberalization were
first begun.
 According to Economist Intelligence Unit (EIU), from 2005 to 2014 Chinese
wages rose by 309%.
 Increasing labour cost, a weak banking sector, growth of energy-intensive and
high polluting heavy industries, widespread government corruption,
inconsistent and unstable laws and demographic challenges are started
affecting Chinese economy.

9.  The Chinese government has indicated its desire to move away from its
current economic model of fast growth at any cost to more “smart” economic
growth, which seeks to reduce reliance on energy-intensive and high-polluting
industries and rely more on high technology, green energy, and services.
 China’s last two Five-Year Plans (FYP), the 11th FYP (2006-2010) and the 12th
FYP (2011-2015), have placed strong emphasis on promoting consumer
demand, addressing income disparities, boosting energy efficiency, reducing
pollution, improving the rule of law, and deepening economic reforms.
 Those plans have also identified a number of industries and technologies that
the government has targeted for development.
 China’s ambitious plan to modernize the structure of its economy comes
from, The National Medium-and Long-Term Program for Science and
Technology Development (2006-2020), often referred to as the MLP
document.
 With MLP, China wants to go from a model of “made in China” to “innovated
in China.”
Challenging the Change

10.  India has a land frontier, a coastline, island territories and airspace to defend.
Therefore, defence forces have to be kept prepared and well equipped to
repel any external threat.
Make in India – Nation’s Perspective