The “Make in India” initiative, launched in 2014, aimed to transform India into a global manufacturing hub by encouraging domestic production and reducing dependency on imports. While the initiative has witnessed some successes, such as increased foreign direct investment and the growth of certain industries, it has also faced significant obstacles. On the positive side, sectors like electronics, automotive, and renewable energy have seen notable improvements, contributing to economic development. However, bureaucratic hurdles, regulatory complexities, and infrastructure challenges have hindered the full realization of the initiative’s potential. Moreover, the global economic landscape, marked by trade tensions and the COVID-19 pandemic, has added external pressures. A comprehensive evaluation must acknowledge both achievements and impediments to formulate effective strategies for sustaining and enhancing the Make in India campaign.
Tag: GS-3 Industrial Growth, Industrial Policy
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The article examines the Make in India policy and its limitations, emphasizing the necessity for an Industrial Policy to address the unmet objective of job creation.
What is the Make in India Policy?
- The Make in India initiative, launched by the Indian government in 2014, aims to elevate domestic manufacturing and position India as a global manufacturing hub.
- The program focuses on attracting investment, fostering innovation, skill development, protecting intellectual property, and building top-notch manufacturing infrastructure.
Objectives
- Increase the manufacturing sector’s growth rate to 12-14% per annum.
- Generate 100 million additional manufacturing jobs by 2025.
- Raise the manufacturing sector’s contribution to GDP to 25% by 2025.
Strategies
- Streamlining Business Processes: Simplifying regulations to ease doing business in India.
- Developing Infrastructure: Upgrading ports, roads, railways, and power generation.
- Skilling the Workforce: Investing in skill development for the manufacturing sector.
- Incentivizing Investments: Providing tax breaks, subsidies, and incentives.
- Focusing on Key Sectors: Targeting specific sectors for development.
Derivatives
Make in India has derivatives like Made in India and Make for India, promoting products assembled or produced in India and manufacturing for the domestic market, respectively.
The rationale behind the Introduction of MII
- Launched in 2014, Make in India aimed to overcome constraints in the manufacturing sector, including inadequate infrastructure, regulatory complexities, and a shortage of skilled manpower.
- Its primary goals were to increase manufacturing’s GDP contribution to at least 25% and create 100 million additional jobs.
Success and Failures of MII
Successes
- Improved ranking in the World Bank’s Ease of Doing Business Index.
- Opened up various sectors to private and foreign investment.
- Growth is observed in sectors like automobiles, electronics, and renewable energy.
- Leadership in mobile phone manufacturing.
Failures
- Failure to create an international niche market.
- Unmet targets for manufacturing sector share in GDP, job creation, and growth rate.
- Challenges include policy paralysis, lack of competitive advantage, and infrastructure bottlenecks.
Why did MII Fail to Achieve its Objectives?
- While the production-linked incentive (PLI) scheme aimed to attract investments and enhance efficiency, the primary goal of creating jobs, particularly in labor-intensive manufacturing, remained unaccomplished.
Can the MSMEs Solve the Jobs Conundrum?
- India’s vast majority of micro, small, and medium enterprises (MSMEs) in the unorganized sector lack the flexibility for substantial job creation, pointing towards the need for a National Industrial Policy.
What Needs to be Done for Job Creation?
- A comprehensive National Industrial Policy is essential, especially for sectors like toys, garments, and footwear, to supplement the production-linked incentive (PLI) in promoting high-end manufacturing and mass job creation.
How can National Industrial Policy help in Job Creation?
- Providing incentives for industries to expand production, exports, and innovation.
- Developing infrastructure to facilitate efficient movement of goods and services.
- Enhancing workforce skills through education and training programs.
- Promoting entrepreneurship and innovation for startup growth.
- Aligning industrial policy with social and environmental goals.
Conclusion
A National Industrial Policy is crucial to generating productive employment opportunities in India, but the awaited new industrial policy (NIP ’23) is currently on hold.
| UPSC Previous Year Questions Mains (2017) Q. “Industrial growth rate has lagged behind in the overall growth of Gross-Domestic-Product (GDP) in the post-reform period.” Give reasons. How far are the recent changes in industrial policy capable of increasing the industrial growth rate? |
Source: IE
Frequently Asked Questions (FAQs)
Q: What are some successes of the Make in India initiative?
A: One notable success of the Make in India initiative is the significant increase in foreign direct investment (FDI) across various sectors. Additionally, industries such as electronics, automotive, and renewable energy have experienced growth, contributing to job creation and economic development.
Q: What obstacles has the Make in India initiative encountered?
A: The Make in India initiative has faced challenges such as bureaucratic red tape, regulatory complexities, and inadequate infrastructure. These obstacles have impeded the smooth execution of the initiative’s objectives and hindered the full potential of certain industries to flourish.
Q: How has the global economic landscape affected the Make in India initiative?
A: The global economic landscape, marked by trade tensions and the impact of the COVID-19 pandemic, has presented external challenges to the Make in India initiative. Disruptions in the global supply chain and economic uncertainties have influenced the initiative’s progress, highlighting the need for adaptability and resilience in achieving its goals.
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