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Day 66 – Q 1. We are in the 7th year of the Make in India programme. What is your assessment of the effects of this flagship initiative? Has the programme been able to meet the intended objectives? Critically examine. 

  • IASbaba
  • August 25, 2020
  • 0
GS 3, Indian Economy, TLP-UPSC Mains Answer Writing
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1. We are in the 7th year of the Make in India programme. What is your assessment of the effects of this flagship initiative? Has the programme been able to meet the intended objectives? Critically examine. 

हम मेक इन इंडिया कार्यक्रम के 7 वें वर्ष में हैं। इस प्रमुख पहल के प्रभावों का आपका आकलन क्या है? क्या कार्यक्रम इच्छित उद्देश्यों को पूरा करने में सक्षम है? समालोचनात्मक जांच करें।

Demand of the question – Write in brief about the Make in India programme and then assess the effects of this initiative over the last 7 years and also critically examine whether the programme has been able to meet its intended objectives.

Introduction

Make in India is a major national programme of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country.

Body

  • The Make in India programme is very important for the economic growth of India as it aims at utilising the existing Indian talent base, creating additional employment opportunities and empowering secondary and tertiary sector. 
  • The Make in India slogan clearly points to the government’s aim to make India a global manufacturing hub. This signals a paradigm shift in focus, from tertiary to manufacturing. 
  • The three major objectives were: 
    • to increase the manufacturing sector’s growth rate to 12-14% per annum in order to increase the sector’s share in the economy; 
    • to create 100 million additional manufacturing jobs in the economy by 2022; and 
    • to ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (revised to 2025) from the current 16%. 
  • Some of the other effects of Make in India initiative can be seen as below:
    • Measures to improve business confidence have led to progressive improvements in India’s rank in the World Bank’s ease of doing business rankings from 142 in 2014 to 100 in 2017.
    • Five industrial corridors and 21 new nodal industrial cities are being developed to boost industrial growth.
    • The Insolvency and Bankruptcy Code 2016 has consolidated all rules and laws pertaining to insolvency into one legislation.

The programme’s effectiveness in achieving its objectives can be seen from the points given below:

  1. The ‘zero defect zero effect’ phrase which came with Make in India campaign has shown positive impact on the Micro, Small and Medium Enterprises (MSMEs) of India. 
  2. The digitization initiative that is part of Make in India has helped make processes much more transparent and easier to implement. At the ground level, we have noticed many companies and customers respond positively to the Made in India tag which was not always the case earlier. Eg- LED lights initiative.
  3. According to the data published by Department of Industrial Policy & Promotion (DIPP) in December 2016, highlighted that the industrial activity rose by 29 percent.  Much of this growth was concentrated in three states- Karnataka, Madhya Pradesh, and Maharashtra. 

Given that big-ticket projects for grand initiatives such as ‘Make in India’ have long gestation periods and lag effects, assessments of such initiatives can be premature. Nonetheless, following points do show the lacunae’s:

  1. The last five years witnessed slow growth of investment in the economy. Gross fixed capital formation of the private sector, a measure of aggregate investment, declined to 28.6% of GDP in 2017-18 from 31.3% in 2013-14 (Economic Survey 2018-19). 
  2. With regard to output growth, we find that the monthly index of industrial production pertaining to manufacturing has registered double-digit growth rates only on two occasions during the period April 2012 to November 2019.
  3. Regarding employment growth, the crux of the debate has been that employment, especially industrial employment, has not grown to keep pace with the rate of new entries into the labour market.

Way forward – 

  • Labour laws should be amended in a way that does not overlook the interest of labour. Progressive labour laws to create more jobs in the market. 
  • Revisit the Land Acquisition Act, a robust land acquisition policy which eases the process of acquisition is essential for Investment in Infrastructure and Manufacturing.
  • Overall re-hauling of transport system through increasing the capacity of railways, highways and expressways.

Conclusion

Going ahead, the Indian manufacturing sector provide an excellent opportunity to international investors to collaborate with existing businesses as most of the businesses have plans to expand through various options which will boost domestic capacity and also help the manufacturing sector in India to pick up pace which will eventually help in achieving the target of 5 trillion dollar economy by 2024.

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