Impact of Make in India over Different Sectors

of India
Posted on September 5, 2016 by Himanshika Sharma 14Comments1
Make in India is a campaign that Prime Minister Narendra Modi has launched on 25th
September 2014 to challenge the ways India’s economy is currently working. The main
motive behind this campaign is to make India one of the leading countries in this
competitive world by promoting manufacturing within the country. The way that
the schemes and policies in Make in India campaign have been designed, clearly depicts
the bright future of the country, if followed with discipline. There is no denying the fact
that India needs disciplined services and ‘Make in India’ promises to provide that.
If you are starting a business in India then you might know what this campaign is all about
and you also might know what particular sectors it is targeting (Click Here if you don’t
know). But, do you have any idea what impact Make in India campaign has on the different
sectors of the economy of India? Well, this is the most important thing if you want to invest
in Make in India projects. It will give wings to your investments to bring more profits. Now
let’s have a look at how this campaign is impacting each sector:
Impact of Make in India on Manufacturing Sector
The main and the prime motive of Make in India campaign is to strengthen the
manufacturing sector. This campaign mainly focuses on this sector just because there is a
lot of scope of growth, employment, and contribution in the economy from this sector.

The main initiative is to make India, a global manufacturing hub. The main thrust of this
campaign would be on reducing waiting period of clearance for the manufacturing projects,
create requisite infrastructure, and encourage easy way for the corporate firms to do
business in India.

The aim was to increase the contribution of the manufacturing sector up to 25% in the
Gross Domestic Product of the country’s economy. Earlier, the contribution was limited up
to 15% but the impact of Make in India has increased the contribution by 7.6% in 2015-16.
In the last several years, this was the fastest change in the sector.

Another aim of the campaign was to increase the employment in this sector. Since
manufacturing is to be increased, then the employment opportunities will automatically
rise up. The poor and the unemployed will get a chance to get involved in this sector. The
employment will generate income, and that, in turn, will increase the purchasing power of
the people.

But, there is not much progress evident as far as the employment is concerned. In fact, IT
industry is still on the top in terms of employment.

Related- Advantages and Disadvantages of Make in India

Make in India Impact on Construction Sector
The real estate sector of the country is the second-largest sector. The employment statistics
in this sector is more than 35 million. The approximate share of this sector in the GDP was
62%-63% in 2009-10 and the government intends to increase this contribution up to 70%-
75% by 2030.

According to the 2011 Census, approximately 377 Million populations is currently residing
in the urban sector of the country, while the campaign aims at increasing this number up to
590 Million by 2030.

The growth of this sector was consistent and the sector grew about 30% in 2005-08. But,
the global financial crisis in 2008 affected the growth rate of the construction sector very
badly. If you believe the stats, then this sector alone is worth USD 78.5 Billion and the
government is planning to increase the worth up to USD 140 Billion by 2017.

The campaign also focuses on bringing worldwide investment for this sector, which
eventually will lead to better housing facilities for the people of India. One of the major
reasons for such a wide investment in this sector can be that the real estate sector is going
to be responsible for providing better infrastructure for the companies that will invest in
the manufacturing sector.

The government has promised almost 1 Trillions of investment till 2017. The private
sectors will be funding 40% of the amount. 45% of the investment will be used in the
construction activities and 20% will be invested to make the sector more advanced.

India is one of those countries that have an acute shortage of the residential houses.
According to a survey done in 2012, the rural areas of the country lack 47.4 million units of
housing. Moreover, the present urban infrastructure is not worthy enough to cater the
demands of the people residing in the urban areas. Therefore, India is in a dire need for
regenerating existing cities and creating new smart cities.

So, with the help of this campaign, the government has launched a new urban development
mission. According to this mission, the government is going to redevelop 500 cities that
support the population of almost 100,000.

The impact on the ‘Make in India’ on the construction sector will lead to the development
of townships, road & bridges, hospitals, recreational facilities, residential/commercial
premises, hotels, resorts, educational institutes, city and regional level infrastructure.

Related- What are the Impacts of GST

Impact on the Tourism & Hospitality Sector
There is no denying the fact that India is a country that is rich in heritage. People from all
over the world step in India to enjoy the ancestral heritage, ancient monuments, beautiful
cities, heart-warming greenery, and great hospitality that India proudly possess. India has
left no stone unturned in attracting the tourists with various initiatives, like Incredible
India and Athithi Devo Bhava.

This sector is the third-largest foreign exchange earner of the country. The total
contribution of this sector in the GDP was 6.88% in 2012-13. And, the government wants to
increase this contribution by 7.5%. Every USD 1 million investment in the sector creates 78
jobs; hence, increase in employment can be the reason of large investment. The
government is also trying to increase the number of domestic tourists as well.

Since foreigners are being driven towards India since ages, then it is also one of the ways of
dealing with the foreign currency. Hence, the focus is also on to increase the Foreign
Exchange Earnings. Moreover, tourism is one of the great sectors for generating
employment opportunities. Hence, the more the investment; the more the employment!

Related- Advantages and Disadvantages of GST

Make in India Impact on IT Sector
Everybody is aware of the growth that the IT sector is witnessing in the present era. If there
is one sector in India that is developing at a rapid speed, then that is IT sector. With the
indulgence of the youth and the foreign companies opening up their branches in India, the
contribution of this sector in the Gross Domestic Product is approximately 9.3%.

India proudly holds the third position in the list of startup hubs. India has encouraged
4200 start-ups in the country. And, the total revenue of this sector is USD 130 Million.

With the help of Make in India, this sector has witnessed the highest growth since last five
years in 2015. The sector has registered approximately 13.5% growth.

The social, mobility, analytics and cloud market (SMAC) holds 1, 50,000 employees. The
government is expecting the growth of SMAC market up to USD 225 Billion by 2020.

The aim of the government for investing in this sector is to make India, a technology driven
country. The Digital India campaign of the government focuses on providing mobile
connectivity throughout the country, making every government process technological, and
e-delivery of citizen services.

The government is going to set up various IT services, software product companies, and
service centers. The investment will also be on the services that are growing rapidly, like
data analytics, knowledge services, legal services, cloud-based services.

If everything goes right, then very soon, India will be a country of technology. With the
development in IT sector, employment opportunities will rise, and the people will become
more knowledgeable about the technology.

Make in India Impact on Automobile Sector

The impact of the campaign on this sector will be in a way that it will be the 3 rd largest
automotive market in the world by 2026. The production of two wheelers has grown from
8.5 Million units to 15.9 Million units per year. The car market is expected to grow by 6
Million+ units annually by 2020.
The contribution of this industry in country’s GDP is approximately 45%. The employment
rate of the sector is about 19 Million. India is the 7th largest producer of vehicles in the
world and produces approximately 24 Million vehicles annually. 3.64 Million Vehicles of
the total production are exported annually.
The government is expecting to increase the position of the sector from 7 th largest to
3rd largest by 2016-17. India is currently the 2nd largest producer of the two-wheeler, largest
motorcycle producer, and the 5th largest producer of the commercial vehicle of the world.
So, these are some of the sectors where Make In India is targeting and the impact of the
relevant policies and schemes is evident as well. The way the government has arranged
these policies defines the enthusiasm of the ministers to take the country to a high level.

Moreover, all of these policies are a great source of creating employment opportunities.
Not just for men but for women as well! Besides, to increase the GDP will be the most
beneficial thing for the country.

Make in India campaign

Make in India is the BJP-led NDA government's flagship campaign intended to boost the domestic
manufacturing industry and attract foreign investors to invest into the Indian economy. The Indian Prime
Minister, Mr. Narendra Modi first mentioned the keyphrase in his maiden Independence Day address from the
ramparts of the Red Fort and over a month later launched the campaign in September 2014 with an intention of
reviving manufacturing businesses and emphasizing key sectors in India amidst growing concerns that most
entrepreneurs are moving out of the country due to its low rank in ease of doing business ratings.

The Make in India Vision

Manufacturing currently contributes just over 15% to the national GDP. The aim of this campaign is to grow this
to a 25% contribution as seen with other developing nations of Asia. In the process, the government expects to
generate jobs, attract much foreign direct investment, and transform India into a manufacturing hub preferred
around the globe.

The logo for the Make In India campaign is a an elegant lion, inspired by the Ashoka Chakra and designed to
represent India's success in all spheres.The campaign was dedicated by the Prime Minister to the eminent
patriot, philosopher and political personality, Pandit Deen Dayal Upadhyaya who had been born on the same
date in 1916.

Why PM wants to Make in India

The Prime Minister called for all those associated with the campaign, especially the entrepreneurs and the
corporates, to step and discharge their duties as Indian nationals by First Developing India and for investors to
endow the country with foreign direct investments. The Prime Minister also promised that his administration
would aid the investors by making India a pleasant experience and that his government considered overall
development of the nation an article of faith rather than a political agenda. He also laid a robust foundation for
his vision of a technology-savvy Digital India as complementary to Make In India. He stressed on the
employment generation and poverty alleviation that would inevitably accompany the success of this campaign.

Launch Ceremony

Prime Minister Mr. Narendra Modi launched the Make In India campaign on September 25, 2014. The date of
the launch was chosen to be of maximum advantage. Coming right after the successful insertion of Mangalyaan
- a wholly indigenously built low-cost probe into the Martian orbit - the event highlighted India's success in
manufacturing, science and technology, and all this at inexpensive costs. It also came just a day ahead of the
Prime Minister's maiden US visit. Calculated to enhance India's attractiveness as an investment destination, the
launch ceremony was held at the Vigyan Bhavan in New Delhi. Thehall thronged with attendees, a number of
whom did not even find seats. Leading entrepreneurs and the CEOs of about 3000 companies from across 30
countries were invited to attend the launch.

Law Minister Mr. Ravishankar Prasad and Commerce Minister Ms. Nirmala Sitharaman were part of the
occasion. Apart from them, a number of corporate head honchos with deep roots in the country also spoke at the
occasion. These include - Mr. Cyrus Mistry (Chairman, Tata Sons), Mr. Kenichi Ayukawa (MD and CEO, Maruti
Suzuki India), Mr. Mukesh Ambani (Chairman & Managing Director, Reliance Industries), Mr. Azim Premji
(Chairman, Wipro Limited), Mr. KM Birla Chairman, Aditya Birla Group), Ms. Chanda Kochchar (MD & CEO,
ICICI Bank), Mr. Phil Shaw (CEO, Lockheed Martin), and Mr. YC Deveshwar (Chairman, ITC).

Sectors in focus

For the Make in India campaign, the government of India has identified 25 priority sectors that shall be promoted
adequately. These are the sectors where likelihood of FDI (foreign direct investment) is the highest and
investment shall be promoted by the government of India.On the campaign launch, the Prime Minister Mr. Modi
said that the development of these sectors would ensure that the world shall readily come to Asia, particularly to
India where the availability of both democratic conditions and manufacturing superiority made it the best
destinations, especially when combined with the effective governance intended by his administration.

Automobiles Food Processing Renewable Energy

Automobile Components IT and BPM Roads and highways

Aviation Leather Space

Biotechnology Media and Entertainment Textiles and garments

Chemicals Mining Thermal Power

Construction Oil and Gas Tourism and Hospitality

Defence manufacturing Pharmaceuticals Wellness

Electrical Machinery Ports

Electronic Systems Railways

Benefits and disadvantages of Make in India

India is a country rich in natural resources. Labour is aplenty and skilled labour is easily available given the high
rates of unemployment among the educated class of the country. With Asia developing as the outsourcing hub
of the world, India is soon becoming the preferred manufacturing destination of most investors across the globe.
Mae in India is the Indian government's effort to harness this demand and boost the Indian economy.

India ranks low on the "ease of doing business index". Labour laws in the country are still not conducive to the
Make in India campaign. This is one of the universally noted disadvantages of manufacturing and investing in
India.

Why Companies were not manufacturing in India

Make in India campaign is at loggerheads with the Make in China ideal that has gained momentum over the past
decade. China is a major rival to India when it comes to the outsourcing, manufacturing, and services business.
India's ailing infrastructure scenario and defunct logistics facilities make it difficult for the country to achieve an
elite status as a manufacturing hub. The bureaucratic approach of former governments, lack of robust transport
networks, and widespread corruption makes it difficult for manufacturers to achieve timely and adequate
production. The Modi government has vowed to remove these hurdles and make the nation an ideal destination
for investors to set up industries.

The Make in India Website

Apart from the launch of a colourful brochure, which should find its way into the hands of anyone intending to
invest into India, the government of India also launched a website to supplement the campaign. The Make In
India website highlights each of the 25 target sectors with statistics, reasons to invest, growth drivers, all policies
relevant to investors and the individual sectors, government support, and opportunities for investors apart from
showcasing the live projects that have been undertaken and FAQs. The website also links to the campaigns
Social Media feeds on Twitter, Facebook, Google Plus, and YouTube.

Criticism and concerns

The NDA government's Make In India campaign has till early October attracted INR 2000 crore worth investment
proposals. The campaign has, despite this,found its fair share of critics. The topmost of these criticisms is
leveled against the incumbent government. It has been felt that the government does not walk its talk - labour
reforms and policy reforms which are fundamental for the success of the Make In India campaign have not yet
been implemented. A number of layoffs in companies such as Nokia India cast long shadows over the
campaign. A number of technology based companies have not been enthused by the campaign launch and have
professed to continue getting their components manufactured by China.

Campaign Name Make In India

Launch Date 09/25/14

Launched By PM Mr. Narendra Modi

Number of Sectors 25

Investment Proposals Received INR 2000 crore (till 9-Oct-2014)