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Make in india summery
1.
2. OBJECTIVES
Make In India Launched
Sectors In Focus Make In India
New Initiatives By GOI
Make in India Campaign
Hindrance In Make In India Sectors
Critical Disapproval
New Policy Need To Be Address.
3. LAUNCHED
Launched on 25 September 2014,in
Vigyan Bhawan, New Delhi.
Prime Minister of India, Narendra Modi
launches it in front of top global CEO’s.
Most favored quote, “FDI for me is First
Develop India and then Foreign Direct
Investment”
4. SECTORS IN FOCUS
• Automobiles
• AutomobileComponents
• Aviation
• Biotechnology
• Chemical
• Construction
• DefenceManufacturing
• Electrical Machinery
• Electronic
• Systems
• Food Processing
• IT and BPM
• Leather
• Mediaand
Entertainment
• Mining
• Oil and Gas
• Pharmaceuticals
• Ports
• Railways
• Renewable
Energy
• Roadsand
Highways
• Space
• TextileGarments
• Thermal Power
• Tourism and
Hospitality
• Wellness
5. IMPROVISED FOREIGN DIRECT
INVESTMENT
• 100% FDI allowed in thetelecom sector.
• 100% FDI in single-brand retail.
• FDI in commodity exchanges, stock exchanges& depositories, power exchanges, petroleum refining by
PSUs, courier servicesunder thegovernment routehasnow been brought under theautomatic route.
• Removal of restriction in teaplantation sector.
• FDI limit raised to 74% in credit information & 100% in asset reconstruction companies.
• FDI limit of 26% in defencesector raised to 49% under Government approval route. Foreign Portfolio
Investment up to 24% permitted under automatic route. FDI beyond 49% isalso allowed on acaseto case
basiswith theapproval of Cabinet Committeeon Security.
• Construction, operation and maintenanceof specified activitiesof Railway sector opened to 100% foreign
direct investment under automatic route.
6. NEW INITIATIVES INITIATED BY GOI
• Processof applying for Industrial License& Industrial Entrepreneur Memorandum madeonlineon 24×7
basisthrough eBiz portal.
• Validity of Industrial licenseextended to threeyears.
• Major componentsof Defenceproducts’ list excluded from industrial licensing.
• Dual useitemshaving military aswell ascivilian applicationsderegulated.
• Servicesof all Central Govt. Departments& Ministrieswill beintegrated with theeBiz – asinglewindow
IT platform for servicesby 31 Dec. 2014.
• Processof obtaining environmental clearancesmadeonline.
• All returnswill befiled on-linethrough aunified form.
• A check-list of required compliancesshould beplaced on Ministry’s/Department’sweb portal.
8. PHARMACEUTICAL
Investment Attributes
3rd largest pharmaceuticals market by 2020.
20% of global exports in generics.
Growth Drivers
The country’s pharmaceuticals industry accounts for about 2.4% of the global pharma
industry by value and 10% by volume.
India is expected to rank amongst the top three pharmaceutical markets in terms of
incremental growth by 2020.
India is the sixth largest market globally in terms of size.
FDI Policy
100% FDI is allowed under the automatic route for greenfield projects.
Sector Policy
The National Pharmaceutical Pricing Policy, 2012 (NPPP-2012) has been notified on
December 7, 2012.
9. CONDITIONS OF PHARMACEUTICAL
SECTORS
CONDITIONS OFPATENT&IPR
1. Indian companiesarepoor on IPR
2. Too costly for most in India
3. Favor'sonly therich
4. IPR scenario isfavorableto MNC’s
5. Indian Universitiesarelow on IPR’s
6. Conversion rateisapoor 4%
7. Indiaisnot likely to benefit by theIPR regime
10. THERMAL POWER
• Investment Attributes
Government istargeting acapacity of 88.5 GW during 2012-17 & 86.4GW
during 2017-22.
• Growth Drivers
• Expansion in industrial activity to boost demand for electricity.
• A growing population islikely to boost demand for energy.
• Increasing market penetration and per-capitausagewill providefurther
impetusto theenergy industry.
• Largecapacity additions(174.9 GW) aretargeted upto 2022.
• FDIPolicy
• 100% FDI isallowed under theautomatic routein thepower sector,
subject to all theapplicableregulationsand laws.
• SectorPolicy
• Electricity Act 2003
• National Tariff Policy 2006
11. HINDRANCE IN THERMAL POWER
SECTOR
A Thermal power project isnot given thego-ahead until it hasaccessto
coal.
Selecting aproper sitefor athermal power plant isvital for itslong term
efficiency and alot many factorscomeinto play when deciding whereto
install theplant.
Guidelinesfor siteselection of coal-based thermal power stationsset by
theMoEF
Locationsof thermal power stationsareavoided within 25 km of the
outer periphery of thefollowing: Metropolitan cities
National park and wildlifesanctuaries
TheINR 8,000 croresproject wasstruck for almost threeyearsasa
changeof government in West Bengal jeopardized thecompany'sland
acquisition plans.
12. MEDIA AND ENTERTAINMENT
3rd largest TV market in theworld.
800 TV channels.
Investment Attributes
•Indiahasalargebroadcasting & distribution sector, comprising 800 TV channels,
6000 multi-system operator, 7 DTH operator.
•Total market sizeof Indian entertainment industry growing by 11.8% over 2012.
Growth Drivers
•Television and AGV
FDIPolicy
•Broadcasting CarriageServices
•Broadcasting Content Services
SectorPolicy
•TheCableTelevision Networks(Regulation) Amendment Act
13. HURDLES IN MEDIA AND
ENTERTAINMENT
Censorship Regulation- Bollywood is the second largest
movie production industry in the world. Modi government
had banned more than 10 movies after getting in power
which will hinder producers & distributors in near future.
Piracy – Piracy & copyright exceeded in past due to
government negligence in keeping the law less
administering .The Law need to be implied strongly on
the pirates which will curb down the rates of piracy in
India.
14. AUTOMOBILE
• 2.15 million vehiclesproduced by 2013-2014
Investment Attributes
• 7% of thecountry’sGDPby volume
• By 2015, Indiaisexpected to bethefourth largest automotivemarket by
volumein theworld.
Growth Driver
• Two-wheelersand three-wheelersareprojected to expand at aCAGR of
9% between 2013-20.
SectorPolicy
• Automatic approval for foreign equity investment up to 100% with no
minimum investment criteria.
15. HURDLES IN AUTOMOBILE SECTOR
To createjobsfor thenearly 10 million workforcethat enters
themarket every year, thecountry needsto moveaway from
servicesdriven model to alabour intensivemanufacturing
driven growth.
Labour law reforms- TheIndustry hasbeen plagued by high
incidenceof strikesdueto outdated labour laws. Thesewere
for long considered to betheflash point between automotive
companiesand their labour forcebut reformscould change
thisscenario in thedaysahead.
Political interests, land disputesetc. Ex. TATA NANO
-Singur case.
16. OIL & GAS
Investment Attributes
• 4th largest consumer of crudeoil and petroleum productsin theworld.
• 2nd largest refiner in Asia.
Growth driver
• New Exploration Licensing Policy and theCoal Bed MethanePolicy havebeen put in place
to encourageinvestments
• Oil importsconstituteover 80% of India’stotal domestic oil consumptionsof May, 2014.
Sectorpolicy
• Thegovernment hasdecided to set up strategic storageof 5.03 MMT of crudeoil at 3
locations– Visakhapatnam, Mangaloreand Padur.
• ThePolicy on ShaleGas& Oil, 2013 allowscompaniesto apply for shalegasand oil rightsin
their petroleum exploration licensesand petroleum mining leases
17. PROBLEMS FACED BY OIL & GAS
• Theoil and gasindustry in Indiacurrently facestalent
shortage: Our study suggeststheindustry islikely to require
around 25,000 additional professionalsin thenext fiveyears
dueto businessgrowth and retirement or attrition in thesector.
Aging workforceisacauseof concern: In linewith theglobal
trend, theaverageageof workforcein theIndian oil and gas
sector ishigh. Around 50% of employeeshavemorethan 20
yearsof experience, and themajority isdueto retirein the
next 5–10 years.
18. IT & BPM
• USD 118 Billion –expected 2014 revenues.
Investment Attributes
• TheIT-BPM sector constitutes8.1% of thecountry’sGDPand contributes
significantly to public welfare.
Growth driver
• Thesector includes600 offshoredevelopment centres(ODCs) of 78 countries.
Sectorpolicy
• National Policy on Information Technology 2012 aimsto increaserevenuesof IT and BPM
industry to USD 300 Billion by 2020 and expand exportsto USD 200 Billion by 2020.
• Allocation of INR 5 Billion for launching apan-Indiaprogramme– Digital Indiaand a
national rural internet and technology mission for servicesin villagesand schools, training in
IT skillsand E-Kranti for government servicedelivery and governancescheme.
19. CHALLENGES IN IT & BPM
Thefirst major problem that theIndian IT firmshavestarted to facein recent times
isthat they arenow subject to different legal lawsand norms.
Each country hasitsown set of rules. For examplenot recruiting older employees
wasfine in India. But they can no longer reject peopleon thegroundsof their age.
A casein point isthe recent lawsuit filed against Infosys, wherein an individual
alleged that thecompany declined employment to him just on thegroundsthat he
wasold.
WhileInfosyshasreiterated that they do not discriminateon age, however, they
wereunableto giveaplausiblereason for rejection.
Thefrequent power outages, poor traffic management, political instability in the
form of strikesand shutdownsall takeatoll on theoperationsof theBPO firms.
20. CRITICAL DISAPPROVAL OF MAKE IN
INDIA
Whether Makein Indiaismadefor consumerswithin Indiaor outsideisnot so
relevant. Theprincipletoday saysthat consumersacrosstheworld likesto purchase
productswhich arecheaper and areof good quality
Indiarankslow on the "easeof doing businessindex.
Labor lawsin thecountry arestill not conduciveto theMakein Indiacampaign.
Thisisoneof the universally noted disadvantagesof manufacturing and investing
in India.
India'sailing infrastructurescenario and defunct logisticsfacilitiesmakeit difficult
for thecountry to achievean elitestatusasamanufacturing hub.
lack of robust transport networks, and widespread corruption makesit difficult for
manufacturersto achievetimely and adequateproduction.
21. NEW POLICY NEEDS TO ADDRESS
Insolent Control- Trading or Importsof goodsfor mass
consumption especially in thefood, consumer goods, electrical
productsand light engineering goodsneedsto becontrolled.
Chineseconsumer goodsflood Indian marketssinceimporters
presently do not haveto takeFDA permission.
Introducing Land Acquisition bill-TheUPA government
created thebiggest bottleneck with itsland acquisition bill,
which makesland so expensivethat it cannot beacquired for
manufacturing. Theonly placeland isavailableisin places
that areuninhabited or barren, and thisdoesnot make
manufacturing attractivefor labor.
CONTD…..
22. Tax PoliciesResuscitate– Indiasubjectscapital gainstax on
profitsmadeon FDI but doesnot levy capital gainstax on
profitsmadeby FIIswhen they sell on thestock market —
whileit can beclearly said FDI isasuperior investment. The
US, UK, Singaporeand other countriesencourageFDI by not
taxing capital gainson saleof shares. Indiashould do the
same.
Retaining Talent - Microsoft, Google, Appleand othersare
what they aretoday becauseof no mean contributionsby
Indiansin thosefirms. You inviteoutsidersto ‘Makein India’
but insidersgo out to ‘makeworld classcompanies’. Mr. Modi
would do well to ensurethat home-grown talent staysin India
aswell.