Introduction:
Launched on September 25, 2014, the ‘Make in India’ initiative aimed to boost manufacturing in India and stimulate the economy through targeted investments in manufacturing and services. The initiative set ambitious goals, including increasing the manufacturing sector’s growth rate, creating additional manufacturing jobs, and raising the sector’s contribution to GDP.
Body:
Impact on India’s Manufacturing Sector:
- Toys Sector: In FY 22-23, toy imports decreased by 70%, amounting to USD 110 million, while toy exports surged by 636%. This indicates a positive shift in the toy manufacturing sector, reducing import dependency and promoting domestic production.
- Production Linked Incentive (PLI) Scheme: The PLI scheme, launched in 2022-23, has been a significant boost to ‘Make in India.’ Covering 14 key manufacturing sectors, it provides incentives to promote domestic manufacturing and production.
- Electronic Systems: Notable companies like Foxconn, Huawei, Samsung, and others have pledged investments in Indian electronic product manufacturing. Additionally, advancements in AI supercomputing systems were introduced in 2023.
- Automobile Components: The automobile sector witnessed a 25% growth in the last decade. Companies like Hitachi expanded their auto-component operations in India, leading to increased employment.
- Aviation: Investments and agreements in aviation manufacturing, such as a drone manufacturing plant established by LH Aviation, demonstrate the positive impact on this sector.
- Defense Manufacturing: The Ministry of Defense earmarked items for local procurement, and private firms engaged in a ₹50,000 crore ammunition production project. Collaborations, like discussions with Russia’s Irkut Corp by HAL, showcase advancements.
- Sector Focus: ‘Make in India’ concentrates on 25 sectors, attracting significant investments from global players like General Motors, Kia, and Tesla. Plans for an electric bus manufacturing plant and investments by major automakers contribute to sector growth.
Contribution to Economic Growth:
- FDI Inflows: India recorded its highest-ever FDI inflow at USD 83.6 billion in 2022-23, reflecting growing investor confidence and a goal to reach USD 100 billion in the current financial year (2023-24).
- Export Growth: ‘Make in India’ contributed to a 30% increase in exports in FY 2022-23, particularly in electronics, automobiles, and pharmaceuticals, contributing to overall economic expansion.
- Manufacturing Sector Growth: The initiative led to a significant increase in the manufacturing sector’s share in GDP, from 15% to 22.6% by 2021, showcasing its positive impact on the economy.
- Construction Sector: ‘Make in India’ encourages growth in the construction sector, aiming for an increased GDP contribution from 62%-63% to 70%-75% by 2030.
- Tourism & Hospitality, IT, and Automobile Sectors: The initiative has positive effects on multiple sectors, including tourism, IT, and automobiles, contributing to GDP growth and creating employment opportunities.
Challenges:
- Investment from Shell Companies: Suspicions of black money routing through Mauritius-based shell companies raise concerns regarding the authenticity of FDI inflows.
- Low Productivity: Indian factories exhibit subpar productivity levels compared to counterparts in Thailand and China, highlighting the need for skill development.
- Small Industrial Units: The size of industrial units hinders economies of scale, limiting investment in modern equipment and affecting supply chain development.
- Infrastructure and Transportation: Challenges in electricity supply, transportation infrastructure, and bureaucratic red tape continue to discourage investment in India.
Way Forward:
‘Make in India’ aims to create an investor-friendly environment for growth and development. Reforms and initiatives undertaken under this program have already attracted increased investment inflows and contributed to economic growth. The initiative positions Indian businesses to produce goods adhering to global quality standards, aiming not just to be “Made in India” but also “Made for the World.” Continued efforts to address challenges will be crucial for sustained success.
In case you still have your doubts, contact us on 9811333901.
For UPSC Prelims Resources, Click here
For Daily Updates and Study Material:
Join our Telegram Channel – Edukemy for IAS
- 1. Learn through Videos – here
- 2. Be Exam Ready by Practicing Daily MCQs – here
- 3. Daily Newsletter – Get all your Current Affairs Covered – here
- 4. Mains Answer Writing Practice – here
