Up and Downsides of Make in India
Up and Downsides of Make in India
PM Modi has officially launched the much hyped “Make in India” campaign. India, in the last decade or so had relied more on service sector rather than manufacturing for economic growth, as a result proportion of manufacturing sector in GDP has stagnated to 15-16% and shrunk by .7% in financial year 2013-2014 showing a negative growth. This campaign will also help in achieving objectives of National Manufacturing Policy i.e. to increase the share of manufacturing sector in GDP from current 15-16% to 25% till 2022 and creating 100 million jobs in this sector by 2022 .
Downside:
-The biggest challenge is to restore the broken trust between industry and government, which was hampered by the policy paralysis.
-India has a myriad of infrastructural bottlenecks and to overcome these it needs to invest $ 1trillion during 12th five year plan. Generating such a huge capital will be a daunting task.
-Another contentious issue is of environmental clearance, which has been surfaced in many projects especially related to mining sector.
-Uncertainty in tax regime (highlighted by Vodafone case) and delay in implementation of GST is also a matter of concern for industries.
-India along with poor infrastructure lacks a proper logistical network for the supply chain of components and materials required in manufacturing industries.
-Manufacturing sector demands highly skilled labour whereas India lacks highly skilled labour force.
-Complex processes have proved to be hurdles in getting procedural and regulatory clearances especially for new entrepreneurs. This also reflects in World Bank’s “Ease of Doing Business” report which ranked India at 134 out of 189 countries in 2013.
-Land acquisition for establishing manufacturing industries will prove to be a tedious task for successful unfolding of this campaign.
Upside:
-As Mr. Modi emphasized on the development of labour intensive manufacturing sector. So, this campaign will generate a lot of employment opportunities.
-Employment will increase people’s purchasing power which ultimately helps in poverty eradication and expansion of consumer base for companies.
- The model of “look east and link west” policy will strengthen the industrial linkages as well as bilateral ties with many countries.
-Government has decided to formulate an auto response mechanism and issues pertaining to procedural clearings will be resolved at different levels in a given time frame, which is a positive step in making industrial friendly environment.
-Foreign investment will bring technical expertise and innovative skills along with the much needed foreign capital.
- This campaign will make India a key part of global value chain and unfolds numerous opportunities for other countries as well.
Conclusion:
The apprehensions of industrial sector are genuine. But the government’s effort will act as the catalyst in mitigating these apprehensions. Also, PM has clearly mentioned that India is seeking long term capital investment because short term investment is volatile in nature and only aims at profit making. This aspect also reflects in PM’s definition of FDI i.e. “First Develop India”. So, these efforts will give the much needed initial thrust to this campaign and its success will make India the powerhouse of manufacturing sector in the world.
Discussion
- RE: Up and Downsides of Make in India -Kavita Singh (09/30/14)
- make in India is not just a slogan raised by our PM, he wants to make it a brand unto itself. And this won't be an easy task. It would require transformation from being the land of Red tapism and Policy Paralysis to being the one with prompt action.
In the last few decades, India has lost a lot of respect in the world economy despite being a hotbed of talent and resources.
So hardselling Brand India would definitely require a few structural changes in the economy to win investors' trust. First of all, Red tapism has to go. Government has to take adequate steps to make our infrastructure world-class. That's one reason why China raced ahead of us in just two decaeds. What our PM is doing at present, viisting countries and inviting them to invest in India is a step in the right direction. But that is just the first step. The next step should obviously be ensuring consistency in regulatory framework. Vodafone like cases should not be allowed to repeat by ensuring a transparency in policy framework.
- RE: Up and Downsides of Make in India -Deepa Kaushik (09/30/14)
- ‘Make in India’ the most popular campaign by Modi is not just a seal or mark carried on the items, but it is the pride of the nation. Though it is our PM who has taken the steps to initiate the same, but it is the duty of every citizen to convert this dream comes true. ‘Make in India’ is as difficult a challenge as it is good to hear. This big initiate definitely has its own set of ups and downs to be discussed.
The major plus being the matter is proud for the nation to prove our ability throughout the world. The next major achievement following this is the expected rise in the employment opportunities which will be a requirement for the newly set-up industrial sector. Rise in the employment has a direct relation with the abolishment of unemployment concern prevailing over a longer period of time. This would again help to reduce or cease the brain-drain. We will be able to utilise our biggest resource of manpower and would be able to utilise them on the constructive note. We would again gear up on the export sector and it is a straight shot to denote a positive upsurge in the economic development.
When we look towards the downsides of ‘Made in India’, rather than calling them the downside, we can more appropriately call them the challenges in implementation of this huge regime. The foremost is the capital investment in the establishment of the new industries and providing the necessary infrastructure and utilities for the employees. This would definitely seek for the foreign investment and we would be indirectly under the holds of foreign companies. Just a loophole and we would always be walking on the rope with the fear of falling into slavery age.
Next, coming to the training of the employees, to have specific skills for the development of the organization. The making process definitely requires the skill within the labour force and that would call for an extensive training. This skill and training procedure again demands some monetary requirement. None less is the environmental pollution resulting in health hazards. Our nation is thickly populated and the industrial set-up would definitely leave its impact on the atmosphere which will indirectly affect the health of the citizens in the surrounding residential areas. We should not land up in the trench of diseases in the greed of making money and developing our economy. If we lose health, then it would obviously affect our productivity and net output.
Every new initiate has their own pros and cons and the life is there to live through the challenges at every step. We should be ready to hold hands with each other and put-in our best efforts to make this campaign a grand success.
