Dr.C.Muthuraja, Make in India, A Boost to the Indian Manufacturing Sector,

1. Make in India
A Boost to the Indian Manufacturing Sector
Dr. C. Muthuraja
Dean, Curriculum Development & Research &
Head, Research Department of Economics
The American College, Madurai - 625 002
(cmuthuraja@gmail.com) - (M-09486373765)
(Presented in UGC Sponsored State Level Workshop on ‘Make in India: A Boost to the Indian
Manufacturing Sector’ on 22.03.2016 organized by Department of Economics, Devanga Arts
College (Autonomous), Aruppukottai-626101)
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2. CONTENTS
♦ INTRODUCTION
♦ Make in India Campaign
♦ Thrust to Industry / Manufacturing/Service
Sector
♦ Focus of Make in India: on 25 sectors
♦ What is ‘Make in India’?
♦ Evaluation & Political Economy of Make in
India
♦ Concerns on Make in India
♦ Government Initiatives
♦ Road Ahead !
♦ APPEAL
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3. Introduction
♦ India is set to emerge as the world’s fastest-
growing major economy by 2015 ahead of China,
as per the recent report by The World Bank
♦ India’s Gross Domestic Product (GDP) is
expected to grow at 7.5 per cent in 2015, as per
the report
♦ The improvement in India’s economic
fundamentals has accelerated in the year 2015
with the combined impact of strong government
reforms, RBI's inflation focus supported by benign
global commodity prices
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4. Make in India Campaign
♦ Launched by Prime Minister Sh. Narendra Modi
and the key objective of Make in
India campaign is to invite businesses not only in
India but across the world to invest & manufacture
in India
♦ The purpose of this campaign is a) Job Creation,
b) Economic Development and c) Global
Recognition
♦ Make in India initiative aims to correct the
composition of Indian GDP which is the root
cause of recession
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5. Make in India Campaign
♦ Currently India’s GDP is heavily tilted in favor of
service sector
♦ Three sectors which contribute to GDP are (a)
Agriculture (b) Industry / Manufacturing & (c)
Services
♦ Current contributions of these sectors in Indian
Economy are a) Agriculture: 28% b) Industry /
Manufacturing: 16% (Lowest) and c) Services:
56% (Highest)
♦ It is clearly visible that our economy is over
dependent on Services sector
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6. Make in India Campaign
♦ New economic policies and its impact on Indian
Governments focused extensively mainly on
Services sector
♦ Service sector generated employment for skilled
workforce whereas low skilled workers were
completely marginalized
♦ Every year approximately 12 million people are
added to existing workforce and overwhelming
majority is either unskilled or low skilled workers
due to urbanization
♦ There was no road map in place for these low
skilled workersSINCE 1881

7. Thrust to Industry / Manufacturing/Service Sector
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♦ Make in India initiative is an honest attempt to revive
the fortunes of Industry / Manufacturing sector
♦ Digital India will help to maintain contribution of
Service sector but manufacturing / industry sector has
to grow at much faster pace to out-pace service sector
♦ Government should target to increase contribution of
Industry / manufacturing from existing 16% to 35% in
next 5 years
♦ Make in India will help to achieve this goal but it
comes with its own set of challenges
♦ Manufacturing is capital and resources intensive
sector which will require conducive environment for
business

8. Thrust to …..
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♦ Labour issues will be major hurdle which the
government is trying to handle through labour reforms
♦ Besides this, a major push is required to upgrade
infrastructure of country
♦ Basically objective is to create ecosystem of small
industries in periphery of manufacturing hub
♦ Government will provide all the approvals under
Make in India initiate in a time bound manner through
single online portal
♦ Make in India is designed to facilitate investment,
foster innovation, enhance skill development, protect
intellectual property and build best in class
manufacturing infrastructure in the country

9. Thrust to …..
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♦ The primary objective of this initiative is to attract
investments from across the globe and strengthen
India’s manufacturing sector
♦ This programme is very important for the economic
growth of India as it aims at utilizing the existing
Indian skill/talent base, creating additional
employment opportunities and empowering secondary
and tertiary sector
♦ The programme also aims at improving India’s rank
on the Ease of Doing Business index by eliminating
the unnecessary laws and regulations, making
bureaucratic processes easier, making the government
more transparent, responsive and accountable

10. Focus of Make in India: on 25 sectors
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♦ These include: automobiles, aviation,
chemicals, IT & BPM, pharmaceuticals,
construction, defence manufacturing,
electrical machinery, food processing,
textiles and garments, ports, leather, media
and entertainment, wellness, mining,
tourism and hospitality, railways,
automobile components, renewable energy,
biotechnology, space, thermal power, roads
and highways and electronics systems

11. What is ‘Make in India’?
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♦ Deregulation and delicensing of the
manufacturing sector
♦ New Infrastructure
♦ Opening up India’s ‘high-value’
industrial sectors
♦ Specific targeting of twenty-five sectors
♦ ‘New Mindset-“an attitudinal shift in how
India relates to investors: not as a permit-
issuing authority, but as a true business
partner”

12. Evaluation & Political Economy of Make in India
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♦ Question the objectives and the strategy itself
♦ what sort of industry are we promoting?
♦ Domestic markets are extremely narrow – Ford and
Honda aren’t producing for the typical rural
agricultural worker or urban casual labourer
♦ These industries are capital-intensive and/or employ
largely skilled labour (employment growth is therefore likely to
be minimal, especially since domestic industry will undergo
considerable upheaval and displacement)
♦ Manufacturers producing abroad are likely to have
developed processes that reflect the capital-labour
ratios that are prevalent in advanced capitalist
countries

13. Concerns on Make in India
 You can get cheap products as they are
manufacturing in the same company
 Change our country from being dependent on
imports to a country of exports
 Provide large scale employment to both skilled
and non-skilled workers
 Call to biggest manufacturers of the world whose
product we import regularly, to open their
production units in India
 Biggest sector after agriculture in India which is
not utilized to its full capacity
 Boost exportsSINCE 1881

14. Concerns on Make in India
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 Increase in employment : We have 475 mn (2nd
largest in the world) persons as a cheap labour
from which 90% is unorganised
 Improvement in infrastructure
 Improvement in education and lifestyle of
common man
 Company makes goods in developed country, the
cost gets higher due to higher salaries and
maintenance cost
 Making of goods by foreign companies increases
job possibility

15. Government Initiatives
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♦ This initiative is expected to increase the purchasing
power of an average Indian consumer, which would
further boost demand, and hence spur development, in
addition to benefiting investors
♦ Government has come up with Digital India initiative,
which focuses on three core components: creation of
digital infrastructure, delivering services digitally and
to increase the digital literacy
♦ Currently, the manufacturing sector in India
contributes over 15 per cent of the GDP. GOI, under
the Make in India initiative, is trying to give boost to
the contribution made by the manufacturing sector and
aims to take it up to 25 per cent of the GDP

16. Road Ahead !
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 IMF forecasted that India will witness a GDP growth
rate of 7.5 per cent in 2016, due to improved investor
confidence, lower food prices and better policy
reforms
 According to mid-year update of United Nations
World Economic Situation and Prospects, India is
expected to grow at 7.6 per cent in 2015 and at 7.7 per
cent in 2016
 Global Economic Prospects (GEP) report by World
Bank, India is leading The World Bank’s growth chart
for major economies
 India to become the fastest growing major economy
by 2015, growing at 7.5 per cent

17. QUESTIONS PLEASE
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♦ QUESTIONABLE QUESTIONS

18. WWW.THANKS.COM
THANKING YOU
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