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All About Make in India UPSC CSE

Make in India

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Summary of Make in India

Make in India is a major national plan launched by the Government of India to encourage investment, nurture innovation, improve skill development, protect intellectual property, and establish world-class manufacturing infrastructure in India. The fundamental goal of this project is to attract investment from around the world and boost India's manufacturing industry. It is overseen by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.

Background of Make in India

Prior to 2014, India's manufacturing industry faced numerous issues, including falling growth, stagnant GDP, investment bottlenecks, talent gaps, and global competitiveness. Infrastructure development has progressed, yet there are still logistics and connection gaps. 'Make in India' also sought to address unemployment, poverty, technological advancement, and national security by lowering reliance on foreign imports in essential industries like the military.

Introduction of Make in India

In September 2014, the "Make in India" program was launched internationally. The Make in India strategy is critical for India's economic growth since it intends to use the current Indian talent pool, create more job opportunities, and strengthen the secondary and tertiary sectors. The plan also intends to improve India's ranking on the Ease of Doing Business index by eliminating redundant laws and regulations, streamlining bureaucratic processes, and making the government more open, responsive, and accountable. Make in India was one of the first 'Vocal for Local' campaigns to showcase India's manufacturing sector to the world. The sector has the ability to accelerate economic growth while also employing a big portion of our young labor population. The Make in India initiative has made great progress and now focuses on the following 27 sectors under Make in India 2.0.

Objective of Make in India

  • To encourage foreign investment for new industrialization while also developing India's existing manufacturing base to rival that of China.
  • Over the next few years, the manufacturing industry is expected to develop by 12-14% annually.
  • To boost its manufacturing sector's proportion of the country's GDP from 16% to 25% by 2022.
  • To produce an additional 100 million employment by 2022(updated to 2025).
  • Encourage growth that is driven by exports.

Four pillar of Make in India

  • New Processes: 'Make in India' recognizes 'Ease of Doing Business' as the single most important factor to promote entrepreneurship for which a number of initiatives have already been undertaken. The aim is to de-license and de-regulate the industry during the entire life cycle of a business.
  • New Manufacture: The government plans to establish industrial corridors and smart cities, as well as world-class infrastructure equipped with cutting-edge technology and high-speed communications. A rapid registration method and better IPR registration infrastructure help to assist innovation and research activities. The skills required for industry must be determined, and workforce development should be pursued accordingly.
  • New Sectors: FDI has significantly increased in defense production, insurance, medical devices, construction, and railway infrastructure. Similarly, foreign direct investment has been permitted in insurance and medical devices.
  • New Mindsets: The 'Make in India' initiative aims to transform the way the government engages with industry. The governing body will work with industry to grow the country's economy, acting as an agent rather than a regulator.

Key Initiatives Undertaken to enable Make in India

  • Production linked Incentive (PLI) Schemes: India's Union Budget 2021-22 has allocated INR 1.97 lakh crore (more than US$ 26 billion) for PLI projects in 14 major industrial sectors, with the goal of improving manufacturing capabilities and exports, in line with India's vision of becoming Atmanirbhar.
  • PM GatiShakti & National Logistics Policy: PM GatiShakti is a government effort aimed at establishing a multimodal logistics infrastructure for national transformation, with the National Logistics Policy intending to lower logistics costs by approximately 10% over the next few years.
  • Industrialization and Urbanization: The Indian government is implementing the National Industrial Corridor Programme to develop greenfield industrial regions that can compete with the best manufacturing and investment destinations globally. The government has approved the development of 11 Industrial Corridor Projects in four phases.
  • New Design, Innovation and R&D: India has the world's third- biggest tech-driven startup ecosystem, with over 79,100 startups. The "Start-up India" project aims to promote entrepreneurship and innovation by building an environment that supports the creation of startups.
  • Discount on Tax: To support the Make in India program, tax rates were rationalized. India presently boasts one of Asia's lower tax rates, making it a highly competitive worldwide economy.
  • One-District-One-Product (ODOP) scheme: The One-District-One-Product (ODOP) scheme is an additional manifestation of the 'Make in India' vision, providing the promotion and production of indigenous products from each district of the country and providing an international platform to artisans and manufacturers of handloom, handicrafts, textiles, agricultural and processed products, thereby promoting the social and economic development of different parts of the country.
  • Scheme for creating Semiconductor Ecosystem: Considering the importance of semiconductors in the global economy, the Indian government has created a USD 10 billion grant scheme to develop a semiconductor, display, and design ecosystem in India.

Other initiatives done by the government in order to strengthen the industrial sector across the country include the following

  • The 14 Government of India services have been combined into one online unified window under the e-Biz site.
  • Establishment of the investor Assistance Cell at 'Invest India' to help, guide, and support investors through the various stages of the company life cycle.
  • Information on 25 industries has been posted on the 'Make in India' website along with data on FDI Policy, National Manufacturing Policy, Intellectual Property Rights, the Delhi Mumbai Industrial Corridor, and other National Industrial Corridors.
  • An ordinance has been passed to facilitate land acquisition for critical projects.
  • A number of items have been removed from the list of defense products that require license. Additionally, dual-use goods no longer require a license.
  • The Ministry of Labour and Employment has created the unified web portal 'Shram Suvidha'. This gateway assists in:
    • Units assigned a Unique labor Identification Number (UN);
    • Filing an unified self-certified online return for 16 labor laws;
    • Random computerized inspections based on objective criteria;
    • Inspectors must upload reports within 72 hours of inspection.

Success of Make in India

  • India's free and transparent policy has resulted in record FDI inflows, totaling $45.15 billion in 2014–2015. The greatest ever FDI in 2021-22 was $83.6 billion, which came from 101 nations and invested in 31 states and 57 sectors.
    • India is expected to attract $100 billion in FDI in the current fiscal year as a result of recent economic changes and increased ease of doing business.
  • The Production Linked Incentive (PLI) plan, which was established in 2020-21, incentivizes domestic output in 14 important manufacturing industries to support the Make in India It enhances domestic production, creates robust supply chains, makes Indian companies more competitive, and increases export opportunities.
    • The initiative is intended to result in considerable increases in output and employment, boosting the MSME ecosystem.

Challenges of Make in India

Even though the effort has been successful in certain areas, it has also been criticized. There are several problems that the country must overcome if it is to meet the ambitious goals set by the establishmen

  1. Impact on Other industries:
    1. India has approximately sixty percent of cultivable land. The concentration on industry appears to have a detrimental influence on agriculture. It can also cause irreparable disruption to productive soil.
    2. One disadvantage of allowing large-scale FDI is that local farmers and small business owners may be unable to compete with multinational corporations.
  2. Exhausting Natural Resources: It is also thought that fast industrialization (even with the emphasis on "going green") might result in an exhaustion of natural resources.
  3. Environmental: With its emphasis on industry, the campaign has the potential to inflict pollution and environmental damage.
  4. India's physical infrastructure must be improved to ensure the campaign's success. To minimize corruption and enhance infrastructure, India may learn from China's fast construction of physical infrastructure such as railroads, roads, power, and airports, which has grown its global manufacturing share from 6% in the 1990s to 24.9% in 2013.
  5. World Market: India failed to develop a worldwide specialized market for its goods and services.
  6. Failed Benchmarks: India did not meet its goals of growing the manufacturing sector's proportion of GDP to 25% by 2025, providing 100 million additional employment opportunities, and improving manufacturing output growth to 12-14% per year.

Contribution in Make in India through Skill India: Skill India and Make in India are key initiatives by the Indian government aimed at transforming the economy. Skill India develops the skills of the Indian workforce, while Make in India attracts investments and creates a manufacturing environment. The strong correlation between these initiatives is evident, as Skill India provides the necessary skilled workforce for Make in India's success, while Make in India creates job opportunities for trained skilled workers.

Way forward of Make in India

  • Labor reforms: As workers have poor protections in labour regulation in India, they tend to resort to violence which leads to arrests and disruption in work. Labour reforms are needed to provide living wage to workers and give them a social security net.
  • Simplifying Tax System: The intricate GST system has imposed significant compliance burdens on small and medium-sized enterprises.
  • Land Reforms: The amendment of the baseline land acquisition legislation aims to simplify the process of purchasing property for defense and development purposes.
  • Skill Training: India is currently falling behind other nations in skill training, necessitating efforts to boost youth participation in skill initiatives.
  • Co-operative Federalism: The Make in India project can not be a success unless all state governments also enthusiastically participate.

Conclusion for Make in India

The Make in India initiative seeks to convert India into a manufacturing, design, and innovation powerhouse for major investments. It has decreased the risk factors for international enterprises by providing trained workers, a business-friendly climate, solid infrastructure, and low manufacturing prices. This approach is encouraging and has lowered investment risks for international firms.

The program has undeniably attracted record levels of foreign direct investment, propelled by transparent policies and the successful implementation of key initiatives such as the Production Linked Incentive (PLI) scheme. The diversification of sectors under Make in India 2.0 signals a forward-thinking approach, emphasizing new processes, manufacturing, sectors, and mindsets.

However, policy gridlock, a lack of competitive advantage, an investment constraint, trade protectionism, infrastructure bottlenecks, labor concerns are also real challenges which India has faced in this programme. To navigate these challenges and ensure the continued success of Make in India, the country must prioritize crucial reforms. Labor reforms are essential to provide workers with adequate protections and a living wage, while simplifying the tax system, undertaking land reforms, and bolstering skill training programs are imperative steps.

Additionally, fostering cooperative federalism is vital, as the success of Make in India hinges on active participation and collaboration from all state governments. As the initiative progresses, constant revision and course correction is required to tackle the many challenges which will invariably come in making this massive programme a success which would transform Indian economy.

Prelims PYQS Of All About Make in India

What is/are the recent policy initiative(s)of Government of India to promote the growth of the manufacturing sector? (2012)

1. Setting up of National Investment and Manufacturing Zones
2. Providing the benefit of ‘single window clearance’
3. Establishing the Technology Acquisition and Development Fund

Select the correct answer using the codes given below:
(A) 1 only
(B) 2 and 3 only
(C) 1 and 3 only
(D) 1, 2 and 3

Correct Answer :(D) 1, 2 and 3

Mains PYQS Of All About Make in India

“Success of ‘Make in India’ program depends on the success of ‘Skill India’ programme and radical labor reforms.” Discuss with logical arguments. (2019)

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