Make in India

Manufacturing in India accounts for around 16 percent of GDP, which is persistent since 1990’s and is relatively low when compared to the 20-percent plus share in countries like Brazil, China, Indonesia, Korea and Malaysia. The manufacturing sector is critical for the economy’s growth as it employs 12.0 per cent of the country’s labour force as well as provides a transitional opportunity to the labour force in agriculture. In addition, the sector has a multiplier effect for job creation in the services sector. According to National Manufacturing Policy (NMP) 2011, every job created in the manufacturing sector creates two-three additional jobs in related activities. The NMP provides for promotion of clusters and aggregation, especially through the creation of national investment and manufacturing zones (NIMZ). Till 2013-14, 16 NIMZs had been announced. Of these, eight are along the Delhi-Mumbai Industrial Corridor (DMIC). Eight other NIMZs have been given in-principle approval: (i) Nagpur in Maharashtra, (ii) Chittoor in Andhra Pradesh, (iii) Medak in Andhra Pradesh (now Telengana), (iv) Prakasam in Andhra Pradesh, (v) Tumkur in Karnataka, (vi) Kolar in Karnataka, (vii) Bidar in Karnataka, and (viii) Gulbarga in Karnataka. If India’s growth has to accelerate towards its correct potential, manufacturing sector growth is a must. Country faces lot of structural constraints for manufacturing sector to grow properly. Constraints related to roads, ports, other infrastructure reduce the productivity. If basic infrastructure can be improved India’s manufacturing sector will become more competitive, which will help India to go on a higher growth path and enabling large scale job creation. According to the Update, a twice yearly report on the Indian economy and its prospects, India’s economic growth is expected to rise to 5.6 percent in FY15, followed by further acceleration to 6.4 percent and 7.0 percent in FY 2016 and FY 2017. The projections could, however, face risks from external shocks, including financial market disruptions arising out of changes in monetary policy in high income countries, slower global growth, higher oil prices, and adverse investor sentiment arising out of geo-political tensions in the Middle East and Eastern Europe. Domestically, the risks include challenges to energy supply and fiscal pressures from weak revenue collection in the short term, the Update said. However, risks could be mitigated to a large extent by focusing on reforms that help the manufacturing sector.

The Government has launched the ‘Make in India’ Programme to promote manufacturing in the country. The “Make in India” initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India,not only in manufacturing but also other sectors. The four pillars are: 

• ‘Make in India’ recognizes ‘ease of doing business’ as the single most important factor to promote entrepreneurship. 
• Government intends to develop industrial corridors and smart cities, create world class infrastructure with state-of-the-art technology and high-speed communication.
• FDI has been opened up for new sectors like Defence production,Insurance, Medical Devices, and Construction and Railway infrastructure in a big way.
• In order to partner with industry in economic development of the country Government shall act as a facilitator and not a regulator.

There are twenty five sectors that have been included in the ‘Make in India’ programme, important among those are:

• Auto Components;
• Automobiles;
• Aviation;
• Biotechnology;
• Construction;
• Defence Manufacturing;
• Food  Processing;
• IT and BPM;
• Mining;
• Oil and Gas;
• Ports;
• Railways;
• Roads and Highways;
• Renewable Energy;
• Thermal Power.

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