Make in India, a Swadeshi Movement was launched by the Indian Government in 2014. It’s a LION step. When this movement was launched, the government had some crucial initiatives in their mind i.e. increase in manufacturing growth in the country and assist the youth in getting employment. However, is Make in India living up to its promise to make India a hub of manufacturing? Has it created 100 Million Jobs by 2020? Is the LION really roaring? Let’s analyze the impact Make in India had on Indian businesses.
Inheriting a faltering economy, with a low GDP growth rate of 5% (2013-14), a fiscal deficit of $86.08 billion, and high inflation of 9%-11%, “MAKE IN INDIA” was launched as part of the government’s initiative to promote India towards an investment-friendly destination. According to a report published in December 2016, the industrial activity rose by 29%. Much of this growth was centralized in three states- Karnataka, Madhya Pradesh, and Maharashtra. India jumped up 30 notches and made its place in the top 100 rankings on the World Bank’s ease of doing business’ index. But there was a catch. The country’s GDP rate had plunged from 9.2% in the third quarter of 2016 to 5.7% in the third quarter of 2017.
Economists concluded that the reasons were poor execution of Goods and Services Tax (GST) and the government’s demonetization drive. The Make in India is supposed to employ the youth of the country, but did it achieve its target? The rate of unemployment has increased from 3.8% (2011-12) to 5% (2015-16), as per the economic survey of 2015-16. But It didn’t stop there. The rate of unemployment has been increasing ever since. It rose from 3.39% in July 2017 to 6.23% in March 2018.
Now the new government is planning to introduce a fresh strategy to boost the Make In India campaign and to get a fresh impetus. If we see past records, we cannot deny that the government has improved the business climate of India and has led it towards a path of sustainable growth. The “zero defect zero effect” phrase came with the Make in India campaign and has indicated a positive impact on the MSMEs (Micro, Small and Medium Enterprises) of India.
As a result, companies produced with one motive in mind only i.e. manufacturing goods with ‘zero defect’ and making sure that goods have ‘zero effect’ on the environment and society. Since its launch, various initiatives have been taken by the government of India to improve the impact rate and sustainable rate of doing the business in India. We know that this campaign will increase our investments in the form of profit. Now, look at the sectors that have been positively impacted by this campaign.
The crucial motive for which this campaign was started was to strengthen the manufacturing sector and make India a manufacturing hub. The main aim of this initiative was to increase employment in this country and lead to a rise in the share of manufacturing in GDP. If the manufacturing rate increases, then employment opportunities will automatically increase. The unemployment rate will reduce. People will start working and employment will lead to an increase in income and that will in turn increase the purchasing power of the people of the country.
But, things do not always turn around the way we expect them to be. As far as the employment and the manufacturing sector is concerned, there is not much progress in this. In fact, the IT sector is still on top with regard to employment and the highest share in GDP.
The automobile sector has played a crucial role in the success of the Government’s Make in India’s initiative. Automobile companies are embracing every single opportunity to leverage India for getting the benefit of low cost and high-quality products. The design for the automobile sector under this campaign is set in a way that it will be the 3rd largest automobile market in the world by 2026. According to the plan, by 2026, the Automotive industry will be known as the engine of the Make in India initiative. The main motive of this plan is to grow this sector by 4 times so that it will contribute over 12% to the GDP of the country and to generate 65mn jobs under this sector. This sector is doing pretty well which has been indicated by the move of many global carmakers who have already set up their base in the country such as- Renault, Suzuki, Honda, Volkswagen. In the coming years, this sector will have various segments embedded in them which will provide a ready-made market to automotive companies.
Food Processing Sector:
The Food Processing sector is one of India’s emerging sunrise sectors and is very vital to the development of the country. This sector does core work by bringing together industry and agriculture. Under Make in India program, 135 cold chain projects were assisted and 7 Mega Food Parks was operationalized by the Ministry of Food Processing. Each Food Park helps in creating 5000 jobs and benefits, 25000 farmers. The industry is also at the forefront in ease of doing business reforms, from a single dedicated investor facilitation cell to custom clearance reforms.
The real estate sector is the second largest sector in the country. The success rate of Make in India highly depends on this sector because of the employment statistics of this sector which is more than 35 million. This initiative focuses on escorting worldwide investment for this sector, which will eventually lead to better housing facilities for the people of this country. The prime reason behind this wide major investment in this sector is that real estate will be accountable for the better infrastructure of the companies which will invest in manufacturing companies. So, the success of the manufacturing sector is directly proportional to the success of the construction sector. The impact of the Make in India on the construction sector will lead to the development of hospitals, recreational facilities, roads/ bridges, hotel, resort, and regional & city level infrastructure.
Everybody is witnessing the growth of the IT Sector in the present era. India proudly carries the third position in the list of startup hubs. India has encouraged 4200 start-ups under this Make in India campaign for the youth of the country. With the support of Make in India, this sector has observed the highest growth for the past five years. With the help of this campaign, youth and foreign companies are opening up their branches in India, which also makes this sector the highest contributor to the GDP of the country.
So, Make in India is targeting these sectors and others with a proper plan and the roadmap of its scheme and policies is pretty evident as well. Moreover, all of these efforts have been made by the government of India and still making to create more and more employment opportunities. But, it is not easy because it’s different making plans and executing them. What do you think, has to Make in India justified its motive? Could its implementation be done better? Will this campaign of Make in India be able to cope up with the damage that the coronavirus pandemic has done to the economy of this country? Only time will tell.