Need For ‘Make in India’ Program
The ‘Make in India’ initiative was launched as part of a wider plan of nation-building initiatives. Initiated to transform India into a global design and manufacturing hub, the ‘Make in India’ program was a step-in-time to a critical situation: by 2013, India’s growth rate had declined to its lowest level in a decade. India was labelled as one of the fragile economies. Global investors doubted whether the world’s largest democracy and the second largest populated country in the world was a risk or an opportunity and whether it was too big to succeed or too big to fail. India was on the brink of severe economic failure!
For the past 25 years, the contribution from the manufacturing sector to India’s Gross Domestic Product (GDP) has remained stagnated at a low 16% and there is an urgent need to enhance this contribution for the overall growth of the Indian economy.
In contrast, the services sector in India, employing skilled English-speaking workers, has grown to over 50% but it cannot provide employment to the brimming masses who possess limited skills and education. Only mid and low-end labour-intensive manufacturing can provide the scale and nature of employment that is required to employ masses. However, the manufacturing sector had to be made vibrant and competitive as it produced the most number of jobs. Hence, this initiative, in the long run, will fill up that gap and stimulate the economy.
The policymaking focus has now shifted to the manufacturing sector with plans to raise its contribution to 25% of GDP and to create 100 million new jobs by 2025. It’s not an easy task as labour-intensive jobs are diminishing due to automation in the manufacturing industry. So, the only way to success is ‘innovation’. The key functions of making goods are shifting to innovation, design and marketing, not manufacturing components or assembling them. What matters is value addition, not just manufacture.
Even today, India’s share of global manufacturing stands at little over 2 percent. For India to achieve its stated goals of reviving the manufacturing sector and providing millions of jobs to unemployed youth, it will need massive investment, including major contributions from foreign investors.
Key Benefits of ‘Make in India’ Initiative
The ‘Make in India’ initiative has much more in it than being a mere slogan. It involves several steps undertaken by the Government of India to improve the overall business environment within the country. It not just represents a comprehensive overhaul and easing of processes and policies, but a complete change in the Government’s mindset – a shift from being an issuing authority to being a strategic business partner. The movement resolves to live by it’s key principle – ‘Minimum Government, Maximum Governance’.
- The purpose of the ‘Make in India’ campaign is multi-fold:
- To encourage domestic and global companies to manufacture their products in India and increase their investment
- To attract foreign capital and technological investment in India
- To build best-in-class manufacturing infrastructure within the country
- To create millions of jobs to provide livelihood to many unemployed youths in the country, and focus on skill enhancement in 25 sectors of the economy
- To increase GDP growth and tax revenue
- To protect intellectual property
- To establish high-quality standards in manufacturing and minimize the impact on the environment
- To foster innovation and transform India into a global design and manufacturing hub
The ultimate goal of ‘Make in India’ initiative is to increase the export trade of the country by providing the much-needed impetus to the manufacturing industry. This is achievable only through a strategy that inspires, empowers and enables in equal measure.
Today, India’s credibility is stronger than ever! There are visible change, momentum and optimism. The ‘Make in India’ movement has put the world’s largest democracy well on road to becoming the world’s most powerful economy.
Don’t miss out on our next blog in the Series. Stay tuned!