2 May 2015

Make in India : Just a Campaign or a Big Manufacturing Revolution to be ?

Prime Minister Narendra Modi unveiled his dream campaign Make in India on Independence Day, 2014. Further he launched this campaign by September 25th, 2014 at New Delhi among the diplomats and industrial heavyweights of India. The campaign was designed by Wieden & Kennedy Group. This campaign is solely aimed to make India a manufacturing hub in the near future & to create millions of jobs. A whole new website http://www.makeinindia.com/ has been created for this purpose. Wherein people can view the diverse sectors, Investment opportunities, FDI policy and a lot more.


Make in India

There are about 25 diverse sectors under Make in India campaign. The FDI limits vary with sectors. The FDI caps are also emphasized for some sectors. The details are given under FDI policy in the Make in India website. PM Modi has assured the world investors that he would change the red tape tag in India to red carpet for better investments. Foreign investors fear to invest in India because of the stringent laws, Poor infrastructure, Corruption and the delay process in getting authorisations. To date to start a business in India, an entrepreneur has to follow 12 procedures which may take up to 27 days. To solve all this hurdles, the DIPP in association with FICCI has created an auto response mechanism where the things can be done within 72 hours. This resolution is a part of Make in India campaign and will be effective in the upcoming days.

The campaign is perceived very well by the virtual world and is a smashing hit too. But when coming to the reality, the success of this campaign can only be witnessed in a time span of few years. Manufacturing in India has only contributed to 15% till last year to the total GDP. Boosting the manufacturing sector will definitely result in improving the Growth rates. To enable investments lot of policy changes are to be done but without affecting the labour rights. Growth in manufacturing sector is vital to move India from developing to developed stage.
Make in India
What stalls manufacturing in India?

At first Infrastructure is to be improved; Connectivity to major ports or stations from the manufacturing area needs to be addressed. The supply chain is complex in India. Then Tax regimes are to be corrected so that future disputes can be avoided between the IT department and the companies. With better understanding of the taxes prevailing the companies can be in friend zone with the IT dept. Thirdly Corruption, this to be removed at the roots. Power shortage also affects the manufacturing at times.  The legal laws are to be updated to the current scenario so that it makes an easy path for the investors. Even in the recent Hannover Fair didn’t make up the expectations following just six B2B agreements and 3 G2G MOU’s.

Mr. Raghuram Rajan, Governor RBI has said that:

“We have to make it sure that there is enough demand. Certainly exports are important. World is growing slowly. Year after year it is not picking up. We have to focus on making industry competitive with rest of world and we have to carefully manage our domestic demand.”

Sounding a note of caution earlier in December last year, Rajan had said that Make in India should not focus only on manufacturing.

“I am…cautioning against picking a particular sector such as manufacturing for encouragement, simply because it has worked well for China. India is different, and developing at a different time, and we should be agnostic about what will work,” he had said.

Since India is an agrarian country Make in India can focus on agrarian businesses which further improve other sections of manufacturing too. Deploying agriculture for other businesses will be of no use to a country like India. And Make in India should help promote Indian start-ups. MUDRA bank has been established to help MSME sector. The farming community should be trained with MSME business ideas so as to take agriculture to next level. Effective planning has to be done prior to any new business start-up. So that the society is not affected in the name of development, proper rehabilitation should be provided to people who are forced to move for industrialisation. The proper utilization of Indian resources will benefit investors, consumers and the government.

In total Make in India is a late but needy wake from the developing area of India. The lion is ready to roar, but the formation of jungle will take some time. The safari route is on the mark. Hope the journey will be pleasant.

(Written by Atshaya Gunasekaran, a freelance writer, nature lover and an IAS aspirant )

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