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Make in india (1)

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Make in india (1)

  1. 1. THE WAY AHEAD MMAAKKEE IINN IINNDDIIAA
  2. 2. INTRODUCTION In the recent few years India has witnessed a remarkable structural transformation and is one of the fastest growing economies in the world. India is focused to embark upon an 8-10% growth trajectory over the next decade. Several new initiatives have been launched by the Government in the last two years, such as ‘Make in India’, ‘Start-up India’, ‘Skill India’, ‘Digital India etc. with an aim to make India number one destination for global FDI and to improve ‘Ease of Doing Business’ in India. ‘Make in India’ initiative was launched on September 25, 2014 by the Government of India with the aim to promote manufacturing in India. The program includes major new initiatives designed to facilitate investment, foster innovation, protect intellectual property, and build best-in-class manufacturing infrastructure. Make in India aims at 25 economy driving sectors including Biotechnology for GDP growth of the country. DBT has entrusted BIRAC with the responsibility of creating a facilitating ecosystem in the country for promoting the manufacturing capabilities of the Indian Biotechnology sector. Hence, BIRAC has established a Make in India Facilitation Cell for disseminating the relevant
  3. 3. information in context to Make in India and attracting investments in the sector. Origin of ‘Make in India’ After India liberalized in 1991, services sector grew contributing significantly to GDP, economic growth, international trade and investment. It was estimated that manufacturing sector’s contribution to GDP stood for 16% where services sector contributed 56.5% to the India’s GDP. According to the Reserve Bank of India (RBI), India’s ITeS/BPO exports rose 37% in 2012-13. While manufacturing exports continue to perform well, most of it remains in the skill-intensive sector (automotive, engineering, etc.). This does nothing for the large number of low-skilled workers who are either unemployed or labouring away in hazardous, inhumane conditions beyond the purview of established formal state regulations. The most urgent need was to upgrade India’s physical infrastructure to encourage domestic and foreign direct investment in the manufacturing sector. This could absorb the rural labour surplus that is migrating to the cities by providing employment in labor-intensive, less technology- intensive manufacturing, regulated by humane labour laws catering to the contemporary needs of the economy.
  4. 4. For India to achieve its stated goals of reviving its manufacturing sector and providing jobs to the tens of millions of its unemployed youth, it was necessary to design policies targeted at low cost mass manufacturing. Thus ‘Make in India’ campaign was launched on September 14, 2014 with the key objective to promote rapid growth of manufacturing sector. This meant not just rapid growth of manufacturing, but also a lead role for manufacturing in India’s growth process. It did not call for discouragement or lowering of services or agricultural growth, it calls for services growth to be pulled by manufacturing growth and not vice versa.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 share of 16%. Make in India has introduced multiple new initiatives, promoting foreign direct investment, implementing intellectual property rights and developing the manufacturing sector. Narendra Modi while introducing the programme in his maiden Independence Day speech, said, “I want to tell the people of the whole world. Come, make in India. Come and manufacture in India. Go and sell in any country of the world, but manufacture here. We have skill, talent, discipline and the desire to do something. We want to give the world an opportunity that come make in India.” He initiative targeted 25 sectors of the economy which range from automobile to Information Technology (IT) to Business Process Management (BPM). The government has introduced several reforms to create possibilities for getting Foreign Direct Investment (FDI) and foster business partnerships. These reforms also aligned with the parameters of World Bank’s ‘Ease of Doing Business’ and aim to improve India’s
  5. 5. ranking on it. The government also intended to develop industrial corridors and build smart cities with state-of-the-art technology and high-speed communication. Innovation and research activities were supported by a fast-paced registration system and improved infrastructure for Intellectual Property Rights (IPR) registrations. The Make in India Vision 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. In the process, the government expects to generate jobs, attract much foreign direct investment, and transform India into a manufacturing hub preferred around the globe. The logo for the Make In India campaign is a an elegant lion, inspired by the Ashoka Chakra and designed to represent India's success in all spheres.The campaign was dedicated by the Prime Minister to the eminent patriot, philosopher and political personality, Pandit Deen Dayal Upadhyaya who had been born on the same date in 1916. Make in India Campaign Objective
  6. 6. Ultimate objective to make India a renowned manufacturing hub for key sectors. Companies across the globe would be invited to make investment and set up factories and expand their facilities in India and use India’s highly talented and skilled manpower to create world class zero defect products. Mission is to manufacture in India and sell the products worldwide. How this would be achieved 1. Skill development programs would be launched especially for people from rural and poor ones from urban cities 2. 25 key sectors have been short listed such as telecommunications, power, automobile, tourism, pharmaceuticals and others 3. Individuals aged 15-35 years would get high quality training in the following key areas such as welding, masonries, painting, nursing to help elder people 4. Skill certifications would be given to make training process, a standard. Currently manufacturing in India suffers due to low productivity rigid laws and poor infrastructure resulting in low quality products getting manufactured. 5. Over 1000 training centres would be opened across India in the next 2 years 6. For companies setting up factories, “Invest India” unit is being set- up in the commerce department which would be available 24/7. The main focus of this department would be to make doing business in India easy by making all the approval processes simpler and resolving the issues in getting regulatory clearances within 48-72 hours so that clearances are fast. To make this possible, special team would be available to answer all the queries related to help foreign investors/companies.
  7. 7. 7. The e-biz portal would be soon launched which would be real time and available 24*7 Benefits: 1. This will help in creating job market for over 10 million people in India. 2. Manufacturing done here would boost India’s GDP, trade and economic growth. Features: 1. Launch of Make in India campaign will take place on 25th Sep 2014 2. The sales pitch would be made available in capital cities in India and countries with time zone similar to India. 3. Over 15000 crores would be spent to open the training centres. 4. Translation of prime minister’s speech would be available in multiple languages German, French, Japanese and Russian. Attendees List: Top corporate honchos from India and world (US, Canada, Australia, Europe and many others) would be attending this grand launch. Here is the small list of companies whose top leaders would be attending:  Tata Group  Reliance Industries  Biocon  Samsung  Honda  Airbus
  8. 8.  Wipro  Vodafone and many more.  LOGO  Make-in-India is a lion's step. The logo is the silhouette of a lion on the prowl, made entirely of cogs, symbolising manufacturing, strength and national pride.  In Indian folklore, the lion denotes the attainment of enlightenment, besides representing power, courage, pride and confidence.  Make in India is an invitation to the world to come make their fortunes in India, and the attendant promise that the playing field will be level, both for Indians and foreigners.  The designer of this far-famed logo is a Kerala-born man who had to drop out of school to make a living as a mechanic and then rose to be counted among India’s top creative professionals, named V. Sunil.     Progress under 'Make In India' scheme
  9. 9.  Significant achievements have been made under the Make in India initiative since its launch on 25th September, 2014.  ‘Make in India’ initiative was launched on September 25, 2014 with the objective of facilitating investment, fostering innovation, building best in class manufacturing infrastructure, making it easy to do business and enhancing skill development. Action Plans for 21 key sectors were identified for specific actions under (i) Policy Initiatives (ii) Fiscal incentives (iii) Infrastructure Creation (iv) Ease of Doing Business (v) Innovation and R&D (vi) Skill Development areas.  Details of achievements under the ‘Make in India’ initiatives in the focus sectors are as follows :  1. Foreign Direct Investment:  The total Foreign Direct Investment (FDI) inflow was USD 160.79 billion between April 2014 and March 2017 – representing 33% of the cumulative FDI in India since April 2000. In 2015-16, FDI inflow crossed the USD 50 billion mark in one fiscal year, for the first time ever. In 2016-17, FDI inflow stood at a record of USD 60 billion, highest ever recorded for a fiscal year ever. According to IMF World Economic Outlook (April 2017) and UN World Economic Situation Prospects 2017, India is the fastest growing major economy in the world, and is projected to remain so in 2017 and 2018. FDI policy and procedure have been simplified and liberalized progressively. Key sectors that have been opened up for FDI include Defence Manufacturing, Food Processing, Telecommunications, Agriculture, Pharmaceuticals, Civil Aviation, Space, Private Security Agencies, Railways, Insurance and Pensions and Medical Devices.
  10. 10.  2. Ease of Doing Business:  Steps taken to improve ease of doing business include simplification and rationalisation of existing rules. As a result of the measures taken to improve the country’s investment climate, India jumped a massive 30 places to 100th in World Bank's ease of doing business rankings as per World Bank Group’s ‘Doing Business 2018: Reforming to Create Jobs’ report. This is driven by reforms in the areas of Starting a Business, Construction Permits, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, and Resolving Insolvency.           SECTORS COVERED  Make in India is a “Be Indian and Made Indian” type of Swadeshi movement; covering 25 sectors of economy.  List of sectors covered under the “Make in India” is as follows;
  11. 11.   S.N. Sector 1. Automobiles 2. Auto components 3. Aviation 4. Biotechnology 5. Chemicals 6. Construction 7. Defense manufacturing 8. Electrical machinery 9. Electronic system design and manufacturing 10. Food processing 11. IT and BPM 12. Leather 13. Media and entertainment 14. Mining 15. Oil and gas 16. Pharmaceuticals 17. Ports 18. Railways 19. Renewable energy 20. Roads and highways 21. Space 22. Textiles 23. Thermal power 24. Tourism & Hospitality
  12. 12. 25. Wellness    Currently manufacturing sector is contributing around 16% in the Indian GDP but the government of India want to make it 25% by 2022. It is worth to mention here that manufacturing sector is contributing around 34% share in the Chinese GDP. Advantages of Make in India 1. Develop Job Opportunity: One of the main purposes of Make in India crusade is to provide job opportunities for as many citizens of India as possible. It has targeted the young generation of the country as its prime beneficiary. The investments in the targeted sectors, i.e. telecommunications, pharmaceuticals, tourism etc. will encourage the young entrepreneurs to come forth with their innovative ideas without worrying about the source of speculation. 2. Expand GDP: Due to the manufacturing of products in India, economic growth is inevitable, which will not only boost the trade sector but also will increase the GDP of Indian economy as with the setting up of new factories and various investments being speculated in the Indian commercial sectors the flow of income will be humongous. Various sectors such as exportation, architecture, textiles, telecommunications
  13. 13. etc. are likely to flourish inevitably, strengthening the Indian economy which is already the seventh largest in the world. 3. Fortify the Rupee: The emergence of the manufacturing industries would automatically convert India into a hub for the fabrication of various commercial products; as a result, there would be a grand collection of the FDI, which, in turn, would strengthen the rupee against the domination of the American dollar. 4. Increase in Brand Value: Most of the urban population prefer international brands rather than putting their faith in Indian retailers. As a result, the small manufacturing companies suffer an extreme loss in the market. Due to the Make in India campaign, such small manufacturers will be provided with a real shot at the business. With, companies investing in such small time retailers from all around the world, the brand value of Indian merchandise will increase dramatically. 5. Ease of Business: India is a nation which ranked 130th on the ease of doing business scale. But with the open invitation given to the entire world to manufacture their products in India, the various restrictions opposed over the entrepreneurs will be lifted and aspiring businessmen from all over the globe could invest in India with no stress at all. 6. Flow of Capital: Since the beginning of capitalization, the Indian currency is being spent on the foreign countries. With the introduction of make in India, the
  14. 14. capital will not only remain in India, but also the foreign currency will be provided to the nation as well. In a nutshell, India will not spend on foreign countries, but the foreign countries will spend in India in the form of investments and wages. Disadvantages of Make in India 1. Negligence of Agriculture: The most negative impact of the Make in India campaign will be in the agriculture sector of India. It is a well-known fact that Indian Territory has 61% cultivable land. With the introduction of industrial sectors, the agriculture in India will be neglected somewhat. 2. Pollution: One of the biggest problems which are prevailing in India is pollution. According to statistics, India has a pollution index of 76.50. With the make in India movement, this pollution level is likely to arise in a couple of years. Eventually, making the condition in India worse. Hence, Make in India might be economically but it will have an inverse effect ecologically. 3. Interest in International Brands: As stated earlier, the brand value of Indian merchandise will definitely increase. But the Indian upper class, which can actually afford such merchandise, is addicted to the foreign label. This will eventually become a big hurdle for the local entrepreneurs as a great level of
  15. 15. promotion is required to build the confidence of people in the local brands. 4. Manufacturing based Economy: Indian economy is one of the largest economies in the world. It constitutes of three sectors i.e. agriculture, industry, and services. Now the Indian economy majors up from the service sector which contributed up to 57% of the GDP. But with the introduction of the Make in India campaign, the economy is likely to rely completely on the manufacturing and exporting while the import industry will remain static. This eventually will be a huge loss for the other economic sectors and would automatically reduce the advancement of Make in India. 5. Disruption of Land: As stated above, India is very rich in the agriculture sector. About 60% of the Indian soil is arable. With the emphasis being given to the Make in India campaign, thousands of companies would come forth to set up their factories on the land which could be used for cultivation. Eventually, this set up of manufacturing factories would lead to the permanent disruption of the agrarian land in the near future.

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