"MAKE IN INDIA"

"Let's built the Atma Nirbhar Bharat that we

are proud of when we celebrate 100 years of
Independence"
-Prime Minister Narendra Modi

CHAPTER-1
INTRODUCTION AND REVIEW OF
LITERATURE
The Make in India initiative was launched by the Prime Minister in September 2014 as part
of a wider set of nation-building initiatives. Devised to transform India into a global design
and manufacturing hub, Make in India was a timely response to a critical situation. By 2013 ,
the much-hyped emerging markets bubble had burst, and India's growth rate had fallen to its
lowest level in a decade. The promise of the BRICS Nations (Brazil, Russia, India, China and
South Africa) had faded, and India was tagged as one of the so-called 'Fragile Five'. Global
investors debated whether the world's largest democracy was a risk or an opportunity. India's
1.2 billion citizens questioned whether India was too big to succeed or too big to fail. India
was on the brink of severe economic failure, desperately in need of a big push.

PLAN
To start a movement, you need a strategy that inspires, empowers and enables in equal
measure. Make in India needed a different kind of the typical statistics-laden newspaper
advertisements, this exercise required messaging that was informative, well packaged and
most importantly, credible. It had to (a) inspire confidence in India's capabilities amongst
potential partners abroad, the Indian business community and citizens at large; (b) provide a
framework for a vest amount of technical information on 25 industry sectors; and (c) reach
out to a vast local and global audience via social media and constantly keep them updated
about opportunities, reforms, etc.

The Department for promotion of Industry and Internal Trade (DPIIT) worked with a group

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of highly specialized agencies to build brand new infrastructure, including a dedicated help
desk and a mobile-first website that packed a wide array of information into a simple and
sleek menu. Designed primarily for mobile screens, the site's architecture ensures that
exhaustive levels of detail are neatly tucked away so as not to overwhelm the user. 25 sector
brochures were also developed-contents included key facts and sector specific contact details,
all of which was made available in print and on the website.

PROCESS
Make in India was launched against the backdrop of the crisis and quickly became a rallying
cry for India's innumerable stakeholders and partners. It was a powerful, galvanizing call to
action to India's citizens and business leaders, and an invitation to potential partners and
investors around the world. But Make in India is much more than an inspiring slogan. It
represents a comprehensive and unprecedented overhaul of outdated processes and policies.
Most importantly, it represents a complete change of the government's mindset- a shift from
issuing authority to business partner, in keeping with the Prime Minister's tenet of "Minimum
Government, Maximum Governance".

PARTNERSHIPS
The Make in India initiative has been built on layers of a collaborative effort. DPIIT initiated
this process by inviting participation from Union Ministers, Secretaries to the Government of
India, state governments, industry leaders, and various knowledge partners. Next, a national
Workshop on sector specific Industries in December 2014 brought Secretaries to the
Government of India and industry leaders together to debate and formulate an action plan for
the next three years, aimed at raising the contribution of the manufacturing sector to 25% of
the GDP by 2020. This plan was presented to the Prime Minister, Union Ministers, Industry
associations and industry leaders by the Secretaries to the union Government and the Chief
Secretary, Maharashtra on behalf of state governments.

These exercises resulted in a road map for the single largest manufacturing initiative
undertaken by a nation in recent history. They also demonstrated the transformational power
of public-private partnership, and have become a hallmark of the Make in India initiative.
This collaborative model has also been successfully extended to include India's global
partners, as evidenced by the recent in-depth interactions between India and the United States
of America.

INTRODUCTION
Make in India, a type of Swadeshi movement covering 25 sectors of the economy, was
launched by the Prime Minister of India Mr. Narendra Modi on 25 September 2014 to
encourage companies to manufacture their products in India and enthuse with dedicated
investments into manufacturing.

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As a strategy it is the road map to respond to global (global + local) challenges through
preparations for a world class manufacturing status and knowledge infrastructure that should
create further knowledge for stepping on to global competitiveness.

The program includes major new initiatives designed to facilitate investment, faster
innovation, protect intellectual property, and build best-in-class manufacturing infrastructure.
Make in India aims at 25 economy driving sectors including Biotechnology for GDP growth
of the country.

LOGO

"Lion" is the symbol of the Make in India program. It is a lion's silhouette filled with cogs.
This symbolizes manufacturing, national pride, and strength. This logo was inspired by the
"Ashoka Chakra", to represent India's success in all spheres.

MINISTRY
It is under the control of the Ministry of Commerce And Industry. A new Make in India
website, www.makeinindiadefence.gov.in has been launched by the Union Ministry of
Defence.

VISION
"ZERO DEFECT, ZERO EFFECT" slogan was coined by Prime Minister of India, Narendra
Modi, to guide the Make in India initiative that our manufacturing should have zero defects
so that our products should not be rejected in the global market. Besides, we should also keep
in mind that manufacturing should not have any negative impact on our environment.

BACKGROUND
The Make in India theme is not new to India. It was highlighted by economists and
entrepreneurs alike as early as in the last decade of the 19th century. Justice M.G. Ranade, a
forerunner of the modern Indian economists, had emphasized in 1892 that science and its
application were the ultimate basis for industrial society (Ranade 1898). He had warned then

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that while India needed pragmatic education and skilled labor, issues of political dominance
(by the British) were attracting far more attention than the formidable though unfelt
domination of capital and skill (Adams 1971). Paying heed to the warning, Laxmanrao
Kirloskar had begun manufacturing India's first iron plough and fodder-cutter at around the
same time (Kirloskar 2003). And later, Jamsetji Tata's efforts culminated in the establishment
of an Indian steel mill.

However, as India attained independence in 1947, the East India Company phobia had
become the zeitgeist of the times. The then socialistically thinking government not only
cordoned-off India from the rest of the world, but it also cordoned-off the sector in favor of
the all-pervasive public sector. critical intermediate goods sectors such as power, steel,
transportation, and telecom were forced into the public sector which lacked competition.
Further, over time, more than 800 industrial items including leather and textiles got reserved
for SSI (small scale industries). The consequent results of the first three-and-a-half decades
were for everyone to see; absence of incentives for the public sector to stay efficient, the
private sector facing unfair competition from the public sector, thwarted incentives for the
private sector to invest and grow out SSI mold, and a resultant poor GDP (gross domestic
product) growth rate. However, reforms began to be introduced quietly by the 1980s, which
are now referred to as reforms by stealth (Panagariya 2004). For example, partial decontrol in
import licensing and domestic pricing began without much fanfare in the mid-1980s.
Government also tried with the idea of establishing EPZs (export processing zones) though
with no much success. Then happened the economic liberalization in 1991, triggered by
India's precarious condition in her BOP (balance of payment). The trigger turned out to be a
watershed event in changing the direction of economic policy. While the new direction stayed
on course, it got slowed down over the next two decades as the governments got mired down
by financial scams, environmental activism, lack of sufficient political support in parliament,
and administrative inertia. In 2005, EPZs were brought back in their new Form called SEZs
(special economic zones). However, SEZs also did not deliver goods.

And now, the Make in India theme has breathed a new life. It found an empathetic mention
by Prime Minister of India, Narendra Modi, in his Independence Day speech from the
ramparts of the Red Fort on 15 August 2014. The popular slogan seems to suggest a
newly-found activist role for the government. However, conventional trade theories do not
champion any active role in governments. Ina free trade environment, it is the comparative
advantage that decides what a country will produce and export (Ricardo 1821). In this
context, one may wonder if the Make in India theme is at odds with the principle of free
market comparative advantage. The answer would be an emphatic no, if the Make in India
theme encourages improvement in India's comparative advantage over time. Many East
Asian economies did exactly that in the second half of the twentieth century. Improving
dynamic comparative advantage is no crime and it certainly cannot be viewed as a
protectionist or autarkic economic policy. Essentially, then, the question boils down to
this-how does one improve and operationalise India's comparative advantage?

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"A country is not a company", wrote Nobel laureate Paul Krugman (1996). Taking a generic
course in economics may not help a budding entrepreneur run a company and a cavalier
business venture may not help her formulate a country's economic policies either!
Importantly, however; successful & sanguine, and, experienced and ethical business
executives can certainly offer a prescriptive direction to economic policies; if they are offered
a conducive ideas-forum to share their views. One can effectively leverage their
problem-solving efforts from within the companies to shape economic policy. In this context
Pune International Centre (PIC) and Mahratta Chamber of Commerce, Industries, and
Agriculture(MCCIA) offered that conducive ideas- forum to leading industrialists who are
members of PIC and MICCA. Four talks were organized at MICCA, Pune, during July 2015
and August 2016, on the topic, "Make in India- Success Stories: Lessons Learnt".

The speakers represented diverse manufacturing industries, namely, health and

pharmaceutical; auto-component and heavy engineering; biofuel and effluent management;
and control instrumentation, steam engineering, and process efficiency sectors; respectively.
They are also diverse in terms of company structure- going by the customary stock market
segmentation, one is a large cap company, another a mid cap company, and yet another a
SME (small and medium enterprises) that had turned into a small cap public limited
company. If three of them are public limited companies, the fourth is an unlisted private
among these four companies. While there is so much diversity among these four companies,
there are quite a few important commonalities among them- they all are, of course, Indian
companies, represent technology driven manufacturing enterprises, are export driven
enterprises, have their manufacturing bases in foreign Countries, and, are exemplary role
models of Indian Multinational that thrived in the post-1991 economic liberalization era.
Therefore, the objective of arranging the talks was two-fold-Distil the experiences, learnings
and strategies emanating from the success stories of these companies; and, galvanize them by
economic theory to make policy prescriptions for India's long road ahead.

FOUR PILLARS OF MAKE IN INDIA

The Make in India initiative is based on four pillars, which have been identified to give a
boost to entrepreneurship in India, not only in manufacturing but also other sectors.

1. New Processes: Make in India recognizes 'ease of doing business' as the single most
important factor to promote entrepreneurship. A number of initiatives have already
been undertaken to ease the business environment. The aim is to de-licence and
de-regulate the industry during the entire life cycle of a business.
2. New Infrastructure: Availability of modern and facilitating infrastructure is a very
important requirement for the growth of industry. Government intends to develop
industrial corridors and smart cities to provide infrastructure based on state-of-the-art
technology with modern high-speed communication and integrated logistic
arrangements. Existing infrastructure to be strengthened through upgradation of
infrastructure in industrial clusters. Innovation and research activities are supported

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 through fast paced registration system and accordingly infrastructure of Intellectual
Property Rights registration set-up has been upgraded. The requirement of skills for
industry are to be identified and accordingly development of the workforce to be
taken up.
3. New Sectors: Make in India has identified 25 sectors in manufacturing, infrastructure
and service activities and detailed information is being shared through interactive
web-portal and professionally developed brochures. FDI has been opened up in
Defence Production, Construction and Railway infrastructure in a big way.
4. New Mindset: Industry is accustomed to see the government as a regulator. Make in
India intends to change this by bringing a paradigm shift in how the Government
interacts with industry. The Government will partner industry in the economic
development of the country. The approach will be that of a facilitator and not a
regulator.

The Make in India program has been built on layers of collaborative effort. There has been
from Union Ministers, Secretaries to the Government of India, state governments, industry
leaders, and various knowledge partners. A National Workshop on sector specific industries
in December 2014 brought Secretaries to the Government of India and industry leaders
together to debate and formulate an action plan for the next three years, aimed at raising the
contribution of the manufacturing sector to 25 % of the GDP in the coming years.

These exercises resulted in a road map for the single largest manufacturing initiative
undertaken by a nation in recent history. They also demonstrated the transformational power
of public-private partnership, and have become a hallmark of the Make in India program.
This collaborative model has also been successfully extended to include India's global
partner, as evidenced by the recent in-depth interactions between India and the United States
of America.

In a short space of time, the obsolete and obstructive frameworks of the past have been
dismantled and replaced with a transparent and user-friendly system to foster innovation,
develop skills, protect IP and build best-in-class manufacturing infrastructure. The most
striking indicator of progress is the unprecedented opening up of key sectors- including
Railways, Define, Insurance and Medical Device- to dramatically higher levels of Foreign
Direct Investment.

An array of measures focused on the ease of doing business in India have also been launched
under the Make in India program. Brand new, IT-driven application and tracking processes
are replacing files and red tape. A number of new initiatives have been launched in order to
streamline and rationalize licensing rules at the state government level, aligning them with
global best practice.

From amendments in Labour law to online filing of returns and from rationalization of the
regulatory environment to increasing the validity of industrial licenses, a lot of changes have

6
been ushered in to make 'Make in India' a reality.

OBJECTIVE / AIM
* Raising the growth in the manufacturing sector to 12-14% per year.
* Creation of 100 million additional jobs in the manufacturing sector by 2022 which
shifted to 2025 due to covid pendmic.
* Increasing the share of the manufacturing sector in the GDP to 25% .
* Skill development among the urban poor and the rural migrants to foster inclusive
growth.
* Encouraging environmentally sustainable growth.
* Enhancing the global competitiveness of the Indian manufacturing sector.

GOAL
Make in India is an initiative of the Government of India to turn India into a global
manufacturing hub.

1. Create employment opportunities: The Make in India initiative seeks to create job
opportunities for millions of people by encouraging companies to manufacture their
products within India.
2. Increase the share of the manufacturing in the GDP: The initiative seeks to
increase the shape of the manufacturing sector in India's gross domestic product
(GDP) from 16% to 25% by 2022.
3. Improve the investment climate: The Make in India initiative seeks to improve the
investment climate in the country by introducing several reforms in areas such as
labor laws, taxation, and regulation.
4. Attract foreign investment: The Make in India initiative seeks to attract foreign
investments into the country's manufacturing sector by introducing a number of
incentives, such as tax relaxed labor laws.
5. Promote innovation and technology: The Make in India initiative seeks to promote
innovation and technology within the Indian manufacturing sector by encouraging
companies to adopt advanced technologies and processes.
6. Increase exports: The Make in India initiative seeks to increase India's exports by
making the country a manufacturing hub for products that can be exported to other
countries.
7. Promote small and medium enterprises: The Make in India initiative seeks to
facilitate the development of small and medium enterprises (SMEs) in the
manufacturing areas of the country which also help to promote the growth of
manufacturing sector in rural and backward areas.

FEATURES

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The Make in India Program is a government initiative focused on encouraging companies to
manufacture in India.

* This government initiative is intended to boost the domestic manufacturing sector and
augment foreign investment in the country.

The Make in India program is one of the key projects of the government of India. Through
the Make in India program, the government intends to:

* Review the hitherto manufacturing sector of India to enhance the growth of the
economy.
* Encourage foreign businesses to invest in India for their manufacturing needs.
* Develop India into a global manufacturing Hub.
* To boost Employment opportunities in the country.

WHY MAKE IN INDIA?

There are multiple reasons why the government has chosen to focus on manufacturing. The
key ones are discussed below:

1. For the past two decades, India's growth story seems to have been led by the service
sector. This approach paid off in the short-run, and India's IT and BPO sector saw a
huge leap, and India was often dubbed the 'back office of the world'. However, even
though the share of the services sector in the Indian economy rose to 57.9% in 2013, it
contributed to only28% in the share of employment. So, the manufacturing sector
needed to be augmented to boost employment. This is because the services sector
currently has low absorption potential considering the demographic dividend in the
country.

2. Another reason to launch the campaign is the poor condition of manufacturing in

India. The share of manufacturing in the overall Indian economy is only about 15%.
This is way lower than our neighbors in East Asia. There is an overall trade deficit

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 when it comes to goods. The trade surplus in service hardly covers one-fifth of India's
trade deficit in goods. The services sector alone cannot hope to answer this trade
deficit. Manufacturing will chin in. The government is hoping to encourage
businesses, both Indian and foreign to invest in manufacturing in India, which will
help this sector and also generate employment in both skilled and unskilled levels.
3. To focus on manufacturing is that no other sector seems to have such a huge
multiplier effect on economic growth in a country, according to various studies. The
manufacturing sector has larger backward linkages and hence, growth in demand in
manufacturing spurs growth in other sectors as well. This generates more jobs,
investments, and innovation, and generally leads to a higher standard of living in an
economy.

CHAPTER-2
CONCEPTUAL AND THEORETICAL
DESCRIPTION

SECTORS COVERED UNDER MAKE IN INDIA

The focus of Make in India is on creating jobs and skills enhancement in 25 sectors. These
include:

1. AutomobilesTourism & hospitality

2. Railways
3. Automobile components
4. Aviation
5. Chemicals
6. IT & BPM
7. Pharmaceuticals
8. Construction
9. Ports
10. Defense manufacturing
11. Electrical machinery
12. Electronics systems
13. Food processing
14. Textiles & garments
15. Leather
16. Media & entertainment
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 17. Wellness
18. Mining
19. Tourism & hospitality
20. Renewable energy
21. Bio-technology
22. Space
23. Thermal power
24. Roads & highways
25. Oil & gas

Make in India 2.0 focuses on 27 sectors with a special focus on ten champion sectors
including:

* Capital good, Auto, Defence, Pharma, Renewable energy, Biotechnology, Chemicals,

Leather, Textiles, Food processing

These ten sectors have the potential to become global champions and drive double-digit
growth in manufacturing in the coming years.

IMPLEMENTATION
* In the manufacturing sector, the action plans are controlled and coordinated by the
Department for Promotion of Industry and Internal Trade (DPIIT).
* In the service sector, the action plans are controlled and coordinated by the
Department of Commerce.

SIGNIFICANCE
* Generating employment opportunities.
* Increasing the GDP by expanding economic growth.
* When FDI inflows become more, the rupee will be strengthened.
* Small manufactures will get a thrust, particularly when investors from abroad invest
in them.
* When countries invest in India, they will also bring the latest technologies in various
fields.
* Due to the various initiatives taken under the Mission, India has moved up the ranks
in the EoDB index.
* Setting up manufacturing centers and factories in rural areas will foster the
development of these areas as well.

MAKE IN INDIA - INITIATIVE

* For the first time, the sectors of railways, insurance, defense, and medical devices
have been opened up for more Foreign Direct Investment (FDI).

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 * The maximum limit in the defense sector under the automatic route has been raised
from 49% to 74%. This increase in FDI was announced by Finance Minister Nirmala
Sitaraman on May 16, 2020.
* In constitution and specified rail infrastructure projects, 100% FDI under the
automatic route has been permitted.
* There is an investor Facilitation Cell that assists investors from the time of their
departure from the country. This was created in 2014 for giving services to investors
in all phases such as the pre-investment phase, execution, and also after delivery
services.
* The government has taken steps to improve India's 'ease of doing business' rank. India
climbed 23 points in the ease of doing business index to 77th place in 2019, becoming
the highest ranked in South Asia in this index.
* The Shram Suvidha Portal, portal, etc. have been launched. The portal offers
single-window access to eleven government services connected with starting a
business in India.
* Other permits and licenses required to start a business have also been relaxed.
Reforms are being undertaken in areas like property registration, payment of taxes,
getting power connection, enforcing contracts and resolving insolvency.
* Others reforms include licencing process, time-bound clearances for application of
foreign investors, automation of processes for registration with the Employees State
Insurance Corporation and the Employees Provident Fund Organization, adoption of
best practices by states in granting clearances, decreasing the number of documents
for exports, and ensuring compliance through peer evaluation, self-certification, etc.
* The government hopes to improve physical infrastructure chiefly through the PPP
mode of investment. Ports and airports have seen increased investment. Dedicated
freight corridors are also being developed.

The government has launched plans to create 5 industrial corridors. They are underway.
These corridors are spread across the length and breadth of India, with a strategic focus on
inclusive development which will argue industrialization and urbanization in a planned
manner. The corridors are:

i. Delhi-Mumbai Industrial Corridor (DMIC)

ii. Amritsar-Kolkata Industrial Corridor (AKIC)
iii. Bengaluru-Mumbai Economic Corridor (BMEC)
iv. Chennai-Bengaluru Industrial Corridor (CBIC)
v. Vizag-Chennai Industrial Corridor (VCIC)

MAKE IN INDIA - PROGRESS

There have been several milestones attributed to the Make in India scheme. Some of the
prominent ones are listed below:

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 a. The introduction of the goods and service tax (GST) has erased the tax procedural
system for businesses. The GST has been a flip to the Make in India campaign.
b. Digitalization in the country has gained momentum. Taxation, company
incorporation, and many other processes have been made online easing the overall
process and improving efficiency. This has upped India's rank in the EoDB index.
c. The new insolvency and bankruptcy code 2016 integrated all laws and rules relating
to insolvency into a single legislation. This has taken the bankruptcy code of India on
par with global standards.
d. Due to schemes of financial inclusion such as the PMJDY, as of May 2019, 356
million new bank accounts were opened.
e. FDI liberalization has helped India's EoDB index to be favorable. Larger FDI inflows
create jobs, income, and investments.
f. Infrastructure and connectivity have received major push through schemes like
Bharatmala and Sagarmala, as well as various railway infrastructure development
schemes.
g. BharatNet- this is a telecom infrastructure provider set up by the government of India
to enhance digital networks in the rural areas of the country. This is perhaps the
world's largest rural broadband project.
h. India is ranked four in the world in terms of its capacity to harness power from winds
and ranked number 6 in the world in harnessing solar power. Overall, India is ranked
fifth in the world in installed renewable energy capacity.

CHALLENGES FACED BY THE "MAKE IN INDIA"

INITIATIVE
This initiative has faced several challenges are -

1. Poor infrastructure: India's infrastructure is inadequate, which is a significant hurdle

in the way of setting up manufacturing units.
2. Lack of skilled labor: India is forcing a shortage of skilled labor in the
manufacturing sector. This has made it difficult for companies to find the right
personnel to operate their manufacturing plants.
3. High cost of production: The cost of production in India is higher than in other
countries due to the lack of economies of scale. This has made it difficult for Indian
companies to compete with global competitors.
4. Lack of investments: India needs foreign investment to develop its manufacturing
sector. However, the lack of investor confidence due to the unstable political climate
and bureaucratic red tape has made it difficult to attract investments.
5. Rigid labor laws: India's labor laws are rigid and restrictive, making it difficult for
companies to hire and fire employees as per their needs. This has made it difficult for
companies to optimize their operations and make them competitive.

Some of the challenges are creating a healthy environment for business, lack of research and

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development and up-gradation, creating labor-intensive technology, increasing the
competitiveness of goods manufactured in India, etc.

Even though the campaign has seen success in some quarters, there have been criticisms as
well. There are also many challenges facing the country if she is to achieve the lofty targets
set by the establishment. Some of the criticisms are laid out below:

1. India has about 60% of cultivable land. The thrust on manufacturing is said to affect
agriculture negatively. It can even cause a permanent disruption of arable land.
2. It is also believed that the rapid industrialization (even with the thrust on "going
green") can lead to a depletion of natural resources.
3. A fallout of inviting large-scale FDI is that local farmers and small entrepreneurs may
not be able to face the competition from international players.
4. The campaign, with all its focus on manufacturing, can cause pollution and
environmental side-effects.
5. These are serious lacunae in the physical infrastructure facilities in the country. For
the campaign to be successful, it is necessary to build up the infrastructure available
in the country and also reduce problems like corruption at the lowest levels. Here,
India can take lessons from China, which has dramatically improved its share of
global manufacturing from 2.6% in the 1990s to 24.9% in 2013. China rapidly
developed its physical infrastructure like railways, airports, roads, etc.

ADVANTAGES OF MAKE IN INDIA

1. Employment generation
The main goal of Make in India is to generate and offer jobs for everyone, particularly
for the nation's younger generation. Sectors such as telecommunication,
pharmaceuticals, tourism, etc. generate jobs. Young entrepreneurs will be inspired to
apply their creative ideas for the country's advancement by the younger generation.
2. Improvement in area
The area is also improved. When a factory or an industry is established in a location,
it draws customers, workers, and other residents. Together, the neighborhood, its
surrounding communities, and the residents of these communities develop. As a
result, the families that live close to these places will have a better financial situation.
3. Good for GDP
GDP stands for gross domestic product. The level of a country's GDP determines its
level of development. The Make in India program will help Indian industries grow,
which will increase the country's income. Developing industries like exporting,
architecture, textiles, communication, etc.would strengthen India's economy.
4. Rise in rupee's value
The value of the rupee will rise as a result of Make in India, which will bring in more
foreign direct investment and raise the rupee's exchange rate with US dollars.
Additionally, this will lessen the impact of the dollar's control over the rupee in India.

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 5. Growth of native products
A shift from foreign brands to native products will occur. Indian consumers are drawn
to international brands and pay little attention to indigenous brands, which hurts local
manufactures. Make in India would help their goods in the nation and start earning a
profit.
6. Technology development
Made in India gives indian access to cutting-edge equipment. This program stimulates
the development of new technology in India. Additionally, strengthening the nation's
labor forcr's abilities is a priority.
7. Simplifying operations
Make in India initiatives to all manufactures operating globally. The government has
lifted several limitations to welcome as many firms as possible.

The young people of India never have the opportunity to live in a setting where they may
hone their abilities and put forward their innovative ideas; as a result, they leave the country
in search of better possibilities. Make in India will create the necessary climate within the
nation and draw creative ideas from the nation's and draw creative ideas from the nation's
bright young people.
Rural India's development is possible through Make in India. When a factory is built, it not
only brings in workers but also stimulates development in the local area. When a factory is
built in a remote region, nearby markets, hospitals, and other amenities become available.

DISADVANTAGE OF MAKE IN INDIA

1. Impact on agriculture
Sixty-one percent of India's farmland is devoted to agriculture, making it an agrarian
society. However, Make in India promotes industrial growth while excluding
agriculture from it.
2. Resource exploitation
Resources are finite by nature, yet human wants are endless. The survival of the
population may soon be in peril due to this.This Make in India initiative focuses on
growing resource-intensive manufacturing sectors.
3. Loss to small entrepreneurs
Make in India welcomes foreign nations to its country, and when these nations
establish manufacturing facilities, they draw residents to them. This causes a loss to
small business owners already working hard to establish their positions.
4. The loss of arable land
The campaign strongly emphasizes the construction of an industrial complex in India.
These production facilities can be located anywhere, and occasionally they even use
agricultural land. Therefore, Make in India will destroy the value of arable land.
5. Losses to other sectors
The primary sector, the industrial or secondary sector, and the service sector comprise
the three main sectors of the Indian economy.However, Make in India focuses more
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 on the secondary sector, leaving the other sectors in the dust. A complete focus on the
manufacturing sector won't lead to economic progress for the nation because the
economy cannot develop by developing one sector solely.

The pollution index for India is currently 76.50, and after the Make in India campaign, this
number will rise undoubtedly.

CHAPTER-3
RESEARCH METHODOLOGY

I use quantitative methodology because it offers tangible data-driven insights crucial for
assessing the efficacy of initiatives like Make in India. By employing quantitative analysis,
policymakers can measure factors such as investment inflow, employment generation, GDP
growth, and sectoral contributions. This approach provides empirical evidence to evaluate the
scheme's impact, identify areas for improvement, and make informed decisions for its
enhancement.

DOES "MAKE IN INDIA" MATTER TO CONSUMERS?

Is the "Make in India" label important to consumers? The answer is yes and no. While "Make
in India" was the most popular label in the country-viewed more favorably even than "Make
in U.S." or "Make in Germany"- quality, price and brand name still mattered more to
consumers than where a product was made.

According to the survey by YouGov, Indians were most likely to check a country of origin
label for food, but also for phones and cars-all options with a good variety of products made
locally and/or made by local brands. When it comes to alcoholic drinks, fewer Indians go by
the origin label, perhaps reflecting a market segment with poorer home-grown choices and
brands.

Origin countries that Indian consumers said would not have a positive effect on their
purchase decision were Bangladesh, Hong Kong, Taiwan and sweden. Consumers were
somewhat divided on chineses products with 58% attesting no positive influence.

15
Attitudes of urban Indian respondents towards country of origin labels
when purchasing a product .

It is a survey of 1,024 urban Indians, by YouGov

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India's largest IT hub set to come up in LUCKNOW
The Yogi Adtiyanath government of Uttar Pradesh has started preparations for setting up a
new IT hub in the capital Lucknow, said the government in a press release.

This IT hub is expected to be India's largest. The Uttar Pradesh Rajkiya Nirman Nigam
(UPRNN) has already prepared a blueprint for setting up the IT hub on 40 acres in the
Nadarganj Industrial Area of Amausi on Kanpur Road.

Three Parts of IT HUB

* Officials said the IT hub will be divided into three parts, including IT Parks, Business
Park and International Incubation Facility Center.
* According to the blueprint of the IT Hub, IT Park is to be constructed on 11.47 acres,
while the Business Park will be developed on 7.4 acres.
* Aside from that, the International Incubation Facility Center will be built on 6.9 acres,
and a total of 8.7 acres of land will be developed as a green area to protect the
environment.
* In addition, a network of roads will be built on 5.8 acres to ensure connectivity
between the buildings constructed in the IT hub.

They will be built in a six-storey building, including a basement and ground.All these three
buildings will also have their parking facilities. The hydraulic parking systems will be used in
their basement parking, according to the statement.

The IT hub will be established as a big incubator of the country, including six important
wings, including- Women Entrepreneurs Hub, Skill and Knowledge Academy, Prototyping
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Center, Research and Innovation Circle, Emerging Tech Wing and U hub Innovation Hub.All
these wings are planned to be developed on five acres of land.It will have all such features
that will attract people, it added.

ATTRACTING MAJOR COMPANIES

Major IT, Financial and tech companies will also be added as strategic partners in the Hub,
which is expected to promote innovation and technological advancement.

The government hopes that significant employment opportunities will be created for IT
professionals while economic development of capital Lucknow will also be possible.

Taking a leaf out of the 'Make in India' initiative by Prime Minister Narendra Modi, an
Export-oriented plastic cluster has been proposed. The cluster, which entails an investment of
Rs 100 crore, would be set up by the Indian Industries Association (IIA) in collaboration with
the central Institute of Plastics Engineering & Technology (CIPET), Lucknow. Man Mohan
Agarwal, president, IIA lucknow chapter, said the proposal had been formally placed before
the Uttar Pradesh STate industrial Development Corporation (UPSIDC) for approval. The
cluster is projected to generate direct employment opportunities to nearly 2,500 youth and
spur industrial activity in the region.

MAJOR ACHIEVEMENTS UNDER MAKE IN INDIA

* As per economist survey 2021-22, in spite of covid-related disruptions,

there is a trend of the positive overall growth of gross value addition (GVA) in the
manufacturing sector.

The total employment in this sector has increased from 57 million in the year 2017-18 to
62.4 million in the year 2019-20.

* Powered by indigenously produced vaccines, India not only achieved

COVID-19 vaccination coverage in record time but also became a major exporter of
much needed life-saving vaccines to many developing and underdeveloped countries
across the world.
* Vande Bharat trains, India's first indigenous Semi high speed train featuring
state-of-the-art coaches and providing an entirely new travel experience to passengers,
is a stellar example of the 'Make in India' success story.

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 * INS Vikrant is India's first domestically made aircraft carrier. India is
achieving new milestones in defense production to reduce imports and be in this core
sector.

* Highest ever merchandise export of 420 billion USD was achieved in FY

2021-22.
* India is currently a mobile and electronics manufacturing hub with global
recognition.
* The HAL Tejas is an Indian single-engine, advanced 4th generation delta wing multi
role combat aircraft designed by the Aeronautical Development Agency (ADA) and
manufactured by Hindustan Aeronautics Limited (HAL) for the Indian Air force and
Indian Navy.

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WALK ON TWO LEGS
Experience over the last several decades shows that in a developing country like India,
adoption of modern technology gets viewed with suspicion, especially if it is initiated by the
private sector. Typically, modern technology has been viewed as anti-labour. Today, the same
fears are being expressed about China as it embraces automation and robotization of its
manufacturing sector (knight 2016). The fears of such jobless growth expressed today had
been echoed for centuries together. Keynes (1931) wrote an essay titled: "Economic
Possibilities for Our Grandchildren''. He alludes to the fact that despite rapid technological
changes and rapid growth in population, the average standard of life has grown fourfold.
Further, in the context of the 20th century, he states that there may be growing-pains of over
rapid changes but that is a temporary phase of maladjustment. To quote Keynes:

We are being afflicted with a new disease, namely, technological unemployment. This means
unemployment due to our discovery of means of economizing the use of labor. But this is
only a temporary phase of maladjustment.

Technology is apolitical in nature and gets harnessed to benefit society at large. Use of
technology increases productivity and reduces cost and prices. In turn, it increases demand
for goods and services. It also increases demand for capital goods that are required to sustain
the technology. The multiplier effect of this, both in the capital goods sector and consumer
goods sector, is more jobs. Moreover, as GDP grows, it also creates more demand and jobs in
service sectors such as education, healthcare, entertainment, and travel, to name a few.
Furthermore, in today's interconnected world, one produces not just for the domestic market
but for the world at large. This is possible only with newer technology and higher scale of
production. Scaling-up, diversifying supplies between domestic and export markets, and
diversifying among various export markets, helps a country insure against varying degrees of
recessionary tendencies in domestic and export markets.

And, it is not as if SMEs have no place in the above scheme of things. Lupin, Bharat Forge,
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Praj, and Forbes Marshall, began with small-scale operations before they became Indian
multinationals. In fact, ten critical components of India's recently launched Mangalayan were
procured by ISRO from MSME tool rooms. In countries such as Germany there is a strong
presence of SMEs or what are known as Mittelstand. They account for 52% of earnings of all
companies and about 54% of them keep bringing new innovative products to market. For
effective contribution by SMEs in the Make in India story, one needs start-up support in
manufacturing. So far, India's start-up support system is mainly focused on the service sector.
Through the ASPIRE programme, the government of India's ministry for micro, small, and
medium enterprises is trying to promote small manufacturing units. Whatit could also do is to
support budding entrepreneurs at various stages of their business- it may provide seed
funding, first in the ideation-to-prototype stage, and then for prototype-to-pilot-production
stage. Later, the entrepreneurs could be introduced to venture capitalists, angel investors, and
private equity fund managers. Moreover, as will be discussed later, labor laws could be made
flexible and requirements for approvals and permissions to start or expand business could be
simplified.

With such a congenial environment, SMEs themselves can bring a positive change in their
perception about their activities. Moving up in the value chain, an ancillary unit must view
itself as an outsourcing partner, reverse engineering must be viewed as re-engineering, a low
cost producer must view itself as a high quality producer, building as per print must be
viewed as customized engineering, and a domestic operator must have aspiration to grow as
an international player. EastAsian companies, many of them SMEs, have integrated
themselves into international production networks or what is also termed as GVCs (global
value chains). Indian Smes too can specialize in their niche production activities and get
integrated as shown by Chinese employment in Foxconn and other labor intensive sectors
such as textile and garments. Still others can create job growth in skilled labor by moving up
the value chain. Thus, small companies or large, labor intensive ones or skill intensive, purely
manufacturing or service-embedded-manufacturing, either type has a scope to grow. To quote
Joshi (2016), "It will be misleading to portray India's developmental challenge as a choice
between two mutually exclusive strategies of industrialisation- one labor intensive and the
other capital and skill intensive. India could and should walk on two legs!"

EASE OF DOING BUSINESS

As per the world bank ratings, out of 190 countries, India ranks as low as 155th and 130th in
terms of ease of starting business, respectively .While these ranks have improved marginally
in the last couple of years, the corresponding ranks for South Korea are 11 and 5. This gap is
starkly wider when we compare the issue of 'enforcement of contracts' parameter. Out of 190
countries, while India ranks way behind 172, South Korea's rank is 1! This has relevance to
how Indian companies are able to attract foreign partners and access FDI. Central
government, on its part, seems to have recognised this issue, and aims at bringing, among
other things, a few of the following changes:

21
 1. Process of applying for industrial license and industrial entrepreneur memorandum to
be made online on 24x7 basis through eBiz portal,
2. validity of industrial licenses to be extended to three years,
3. services of all Central government departments and ministries to be integrated with
eBiz-a single window IT platform for services,
4. a check-list of required compliances to be placed on ministry/department web portals,
5. all returns to be filled on-line through a unified form, and,
6. process of obtaining environmental clearances to be made online.

In addition, however, confidence has to be installed among companies on contract

enforcement issues. This, in part, can be done by the government giving up its propensity to
exhume retrospective tax collection and by setting up judicial mechanisms for a quicker
redressal of commercial disputes. such initiatives, of course, should not remain only on paper,
should not be one-time events, and must improve over time.

Importantly, ease of doing business can very much be enhanced by the local and state
governments. In fact, they can do a yeoman service to their own residents if they attract
investments by ensuring quality of infrastructure in terms of speedy connection and access to
water, power, land records, and construction permits from tehsildar office, payment, and
document verifications. Such facilities reduce transaction costs significantly and increase
competitiveness of different states and towns in bringing business in their area.

PRICE STABILITY
Two obvious supply shock scenarios spark-off inflation in India. One is the act of the
Almighty causing droughts and/or a succession of droughts, and the second is the act of
Arabs causing the petroleum cartel to raise the price of oil. A combination of these two
cost-push factors, coupled with domestic demand pull policies and market intervention by
government, had caused average annual inflation to reach double digits during 2008 to 2013.
For example, during 2006 to 2013, government procurement prices on wheat and rice had
gone up by 113 %, a majority of which occurred in the pre-election years. This
policy-induced upward price shock gets transmitted to general price level. In fact, as a result
of sustained price support, production of wheat has increased by 850 per cent since the 1960s.
And, this has come at the cost of orphaning production of non-cereal staple crops such as
pulses which have grown only by 50% since the 1960s. It is no wonder that prices of pulses,
an important source of protein for an average Indian, have crossed 200 rupee per kilogram in
recent times. Rural wages also went up significantly by about 16% per year during 2008 and
2013 partly due to EGS (employment guarantee scheme) and partly due to revised salaries
by the pay commision. Despite the above conditions, RBI had a soft approach to raising
interest rates in response. Thus, both cost push and demand pull factors caused substantial
inflation till 2013. In the last few years, oil prices have come down dramatically going down
even below $50 per barrel and the monsoon has been good in 2016. These supply side factors
have reduced inflation significantly. Current CPI (consumer price index ) inflation as of

22
August 2016 has come down to about 5.3% .

Given these conditions, ceteris paribus, the recently established Monetary Policy Committee
of RBI may be adopting a flexible inflation targeting within a band of 4 to 6 %. Currently, the
RBI repo rate is 6.97% (october 2016). At the current low level of inflation, it just may want
to lower interest rates further to boost investments. If investments, employment, aggregate
demand, and therefore GDP are to rise, and that too without inflation, A few Caveats are
important. The transmission mechanism of RBI's lowering of interest rate is weak at this
time. This is so, for lowering of repo rate by RBI say by about 50 basis points results in
reduction in commercial bank lending rates only by about 25 basis points. Full transmission
does not happen, for the government regulated interest rates on small savings remain fixed
for a year, which form a benchmark for fixed deposits of commercial banks. These in turn,
form the basis for lending rates of commercial banks. Hence, small savings rates may have to
be made to move along with other policy rates. Similarly, SLR (statutory liquidity ratio) may
have to be lowered below the existing 21 percent to allow banks to lend more to the private
sector. Another feature that has hampered commercial bank lending is the steep rise in
stressed assets. Stressed assets of PSBs (public sector banks) were about 14% in September
2015. Recapitalisation of banks, buying of stressed assets by a newly established quasi
governmental organization which would focus on recovering the bad loans and changing the
ownership pattern of banks overtime, are some of the changes that would increase the
efficacy of monetary policy.

Finally, as referred to in the earlier section, ease of doing business has to improve if more
investments have to happen in response to lowering of interest rates. In fact, as reported by
Joshi (2016), a "commercial courts bill" is being given consideration to decide on judicial
mechanisms for a quicker redressal of commercial disputes. This should be a good
development. Moreover, to subside inflationary pressure from the agricultural sector,
attention may be focussed on promoting production of non-cereal crops such as pulses,
promoting FDI investments in modern agri commodity supply chains, and reviving the future
(Deodhar 2016). Similarly, labor compensation in EGC could be made based on piece rate
rather than daily wage to avoid moral hazard problems, and EGC must be employed strictly
in non-sowing and non-harvest seasons. This could ensure that both the agricultural
production and the rural assets such as roads, wells, bunds, check-dams get constructed
alongside the scheme expenditure and agricultural wages do not spiral up during sowing and
harvesting seasons. Overall, prices will be stable if increased aggregate demand is met with
increased aggregate supply.

LABOR LAWS
Furthermore, reforms in labor laws may have to be undertaken. For example, a manufacturing
unit comes under the preview of Factories Act 1948, the moment it employs 10 or more
workers with power or 20 or more workers without power. As a result, companies have a
disincentive to expand operations, for the moment they hire beyond 10 (or20) workers, they

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are restricted to only 50 hours of overtime work per worker per quarter, and women are
excluded from working in night shifts (ILO 2014). The minimum worker limit on companies
to come under the purview of Factories Act could at least be raised to 20 (40) workers,
respectively. In fact, the overtime restriction could be raised to 100 hours and with certain
safety provisions women too be allowed to work in night shifts. Currently, all factories in a
particular area are allowed to have weekly-off only on a specific day. They are allowed to
have staggered weekly-offs on different days so that the problem of power load-shedding will
be managed much more effectively, preventing valuable production loss. At present, the rules
of Factories Act are expected to be amended by the State government. They should be
allowed to be amended by the Central government so that the rules get changed quickly
across states and remain consistent throughout the country.
Similarly, Industrial Dispute Act (IDA) 1947 requires that a company must take approval
from the government for laying-off workers orr shutting the company down if it employees
100 or more workers. As a result, companies are unable to adjust to changing market
conditions by alerting its labor requirement. Moreover, under extreme conditions, exit of
loss-making companies becomes very difficult. Amendment to this act should be made so
that companies are required to take government approval only if they employ 300 or more
workers. This flexibility will provide confidence to the industry to invest in manufacturing.
Also, while workers have the legitimate right to form unions, too many unions in a factory
create problems in terms of inter-union rivalries among workers, and companies find it
difficult to deal with many unions simultaneously. As a result, the transaction cost of
negotiations with workers is too high. The norm on the minimum number of workers required
to form a union should be raised to at least 30%. Government of Rajasthan has brought about
some such changes in the industrial laws (TOI 2014b). Gujarat and Maharashtra are
following suit. Other states may have to actively pursue this objective to promote
manufacturing. It is worth remembering that one of the reasons for EPZs and SEZs not
succeeding in India in comparison to China was that they failed to address the above
mentioned inflexibilities.

SKILL UPGRADATION
Skill upgradation is an important prerequisite to innovations, for latent ideas and creativity
can blossom with training. Labour skilling is a merit good and the role of government in its
provision cannot be overemphasized. Social benefits of this merit good are much larger than
the benefits accruing to the skilled individuals alone. To this end, for several decades,
governments have run institutions such as ITIs (industrial training institutes) and
polytechnics. However, for a rapidly growing and modern manufacturing sector, requirements
of a well-trained workforce and the polytechniques will change and grow by leaps and
bounds. To accommodate this need, governments could bolster and add to their existing
programmes by tapping the vast and experienced pool of retired technical personnel from two
behemoths- Armed Forces and Indian Railways! This retired pool of technical personnel,
ranging from seasoned masons to mechanics, electrician to engineers, clerks to chartered

24
accountants, and paramedics to pediatricians, can be productively employed in teaching and
training at various levels of vocational programs for skilling the workforce. Private sector can
also play its role in these efforts. For example, companies like Lupin fund high school and
ITI education of children in remote villages and in turn create a pool of semi-skilled and
skilled workforce right where the greenfield investment projects are going to come up.
Similarly, Bharat Forge and Praj too have been at the forefront of similar CSR (corporate
social responsibility) activities. In fact, as per the new Companies Act, from the fiscal year
2015, Indian government has mandated that companies with certain threshold levels of
turnover, profits on CSR activities. Other corporations may consider this requirement as an
opportunity to upgrade skills of their potential workforce through CSR activities.

CHAPTER-4
ANALYSIS AND INTERPRETATIONS

FOREIGN DIRECT INVESTMENT (FDI)

* 100% FDI allowed in the telecom sector.
* 100% FDI in single-brand retail.
* FDI in commodity exchanges, stock exchanges and depositories, power exchanges,
petroleum refining by PSUs, courier services under the government route has now
been brought under the automatic route.
* Removal of restriction in tea plantation and 100 % in asset reconstruction companies.
* FDI limit of 26% in defense sector raised to 49% under government approval route.
Foreign Portfolio Investment up to 24% permitted under automatic route. FDI beyond
49% is also allowed on a case to case basis with the approval of Cabinet Committee
on Security.
* Construction, operation and maintenance of specified activities of the Railway sector
opened to 100% foreign direct investment under automatic route.

The 'Make in India ' campaign aims to make India a global

manufacturing hub, but according to recent RBI data, both FDI
in manufacturing and the percentage of FDI flowing to
manufacturing declined in 2015-16.
The logic behind the government's Make in India initiative is clear. As Prime Minister
Narendra Modi stated in his speech at the launch of "Make in IndiaWeek" in Mumbai on

25
February 13,2016.

We launched the Make in India campaign to create employment and self-employment

opportunities for our youth. We are working aggressively towards making India a global
manufacturing hub. We want the share of manufacturing in our GDP to go up to 25% in the
near future.

And the way to do this, according to Make in India, is to increase the share of manufacturing
in India's GDp to 25% by 2022, which is expected to generate approximately 100 million
jobs for Indian workers.

So, how are we doing so far? If you believe the headlines, pretty well. Responding
to the lifting of foreign direct Investment (FDI) caps in several sectors, efforts to improve the
ease of doing business and of course Prime Minister Modi's frenetic wooing of investment in
foreign travels, gross FDI flows to India jumped 27% to $45 billion in 2015-16, an all time
high. Even the Finance Ministry's Usually measured Economic survey 2015-16 touted the
FDI increases as a success for Make in India. with our social media feeds full of stories about
this that investment, clearly the #The MakeInIndia lion is roaring.

But the closer you get to the lion, the more the roar sounds like a meow.

Consider the recent FDI data from RESERVE BANK OF INDIA (RBI), broken up by
sector, since Make in India specifically concerns manufacturing. After an encouraging jump
to record $9.6 billion in 2014-15, FDI in manufacturing actually fell to $8.4 billion in
2015-16 (below the $9.3 billion it had reached in 2011-12.

Foreign investment in Indian manufacturing

Annual FDI inflows to India in manufacturing (US$ billion)

Source - Reserve Bank of India, 2015-16 Annual Report

Note that these numbers cover inflow approved by the RBI and the other agencies and
exclude share purchases, reinvested earnings and so on. This pattern is consistent with the

26
data from the Department of Industrial Policy and Promotion, analyzed here. Furthermore,
the percentage of FDI flowing to manufacturing; which has been in the range of 35-40% for
the past four years, dropped to 23% in 2015-16. Rather than manufacturing, services- think
e-commerce providers like Amazon, Snapdeal and Flipkart, ride-sharing services like Uber
and Ola - seem to be drawing a greater share of the investment.

Proportion of FDI going to manufacturing

FDI in manufacturing as a percentage of total annual FDI to India

Source -Reserve Bank of India

What about the broader economy?

After all, Make in India's main objective is to raise the share of manufacturing in the
economy as a means of generating jobs.

Making in India
Percentage share of manufacturing in Indian economic out

GDP in 2004-05 prices, GVA in 2011-12 prices

27
Source - Reserve Bank of India

Sadly, no meaningful change yet: the share of manufacturing has been flat for the past
decade, with a slight downward trend.

Here's the rub: there is no doubt that building infrastructure, liberalizing land and labor laws
and improving the ease of doing business is difficult and time consuming and will take time
to play out. But the Modi government needs to convince voters that change is happening and
fast.

Which is the genius of the Make in India campaign - it is essentially a branding exercise
under which the government claims credit for pretty much everything. Every factory
inaugurated, every defense deal signed, every shovel struck into the ground will now be
accompanied by the hashtag #MakeinIndia, even if the percentage of GDP arising from
manufacturing stays exactly where it has been for the past few decades.

SCHEMES LAUNCHED TO SUPPORT MAKE IN INDIA

* Skill India Mission:
Aims to employ 10 million in India annually in various sectors to support the effective
implementation of the Make in India campaign, there is a need to upskill the large
human resource available.
* Startup India:
Aims to build an ecosystem that fosters the growth of startups, driving sustainable
economic growth & creating large-scale employment.
* Digital India:
Aims to transform India Into a knowledge-based and digitally empowered economy
by making services completely online.
* Pradhan Mantri Jan Dhan Yojana (PMJDY):
Envisages financial inclusion to ensure access to financial services, namely banking
savings & deposit accounts, remittances, credit, insurance, pension in an affordable
manner.
* Smart Cities:
Aims to transform and rejuvenate Indian cities.
* AMRUT (Atal Mission for Rejuvenation and Urban Transformation):
Aims to build basic public amenities and make 500 cities in India more livable and
inclusive.
* Swachh Bharat Abhiyan:
Aims to make India cleaner and promote basic sanitation and hygiene.
* Sagarmala:
Aims at developing ports and promoting port-led development in the country. Several
ports are being constructed and renovated under this project.

28
 * International Solar Alliance (ISA):
India's initiative aimed at promoting research and development in solar technologies
and formulating policies in that regard. The headquarters of IAS is in
Gurugram(Haryana).
* AGNII:
AGNII or Accelerating Growth of New India's Innovation was launched to push the
innovation ecosystem in the country by connecting people and assisting in
commercializing innovations.
* National Single Window System (NSWS):
The national single windows system has been soft-launched in September 2021 to
improve the ease of doing business by providing a single digital platform to investors
for approvals and clearances.
This portal has integrated multiple existing clearance systems of the various
ministries/departments of the government of India and state government to enhance
the investor experience.
* Gati Shakti:
The government has also launched a programme for multimodal connectivity to
manufacturing zones in the country, called the Prime Minister's Gatishakti
programme, which will ensure logistical efficiency in business operation through the
creation of infrastructure that improves connectivity.
* One-District-One-Product (ODOP):
This initiative aims at facilitating the promotion and production of indigenous
products from each district of the country and providing a global platform to the
artisans and manufacturers of handloom, handicrafts, textiles, agricultural and
processed products, thereby further contributing to the socio-economic growth of
various regions of the country.
* Improving Toy Exports and Reducing Imports:
To address the imports of low-quality and hazardous toys and to enhance domestic
manufacturing of toys, several strategic interventions such as increase of basic custom
duty from 20% to 60%, implementation of quality control order, mandatory sample
testing of imported toys, granting more than 850 BIS licenses to domestic toy
manufacturers, development of toy clusters etc. have been taken by the government.
* Scheme for Building Semiconductor Ecosystem:
Recognising the importance of semiconductors in the world economy, the government
has launched a USD 10 billion incentive scheme to build a semiconductor, display,
and design ecosystem in India.

FDI BOOST - MAKE IN INDIA

The government of India is making continuous efforts under Investment Facility for
implementation of Make in India action plans to identify potential investors. Support is being.
provided to Indian Missions abroad and State. Governments for organizing events, summits,

29
road-shows and other promotional activities to attract investment in the country under the
Make in India banner.

India has recorded the highest ever annual FDI inflow of USD 83.57 billion in the financial
Year 2021-22 as compared to US $ 45.15 billion in 2014-2015. In the financial year
2014-2020, India had received FDI inflow worth US$ 358.30 billion which is 53% of the FDI
reported in the last 20 years (US$ 681.87 billion). India is rapidly emerging as a preferred
country for foreign investments in the manufacturing sector. FDI Equity inflow in
Manufacturing Sectors has increased by 76% in FY 2021-22 (USD 21.34 billion) compared
to the previous FY 2020-21 (USD 12.09 billion).

OUTCOMES
* A major success was reported from the mobile phones manufacturing sector, which
saw 120 units being set up. This led to the replacement of the import of completely
built units (CBUs) by domestically assembled and manufactured units. The country
saved Rs. 3 lakh core of possible outflow from 2014. The import of mobile phones is
expected to come down.
* India became a net exporter of electricity. A total of 7203 MU were exported to
Nepal, Bangladesh, and Myanmar during 2017-18.
* One of the world's largest 649-MW solar power plants in Tamil Nadu was
commissioned on September 21, 2016.
* Two path-breaking prototype locomotives of WAGC3 & WAG11 class of 10,000 and
12,000 hp respectively were developed indigenously by converting existing diesel
locomotives to upgrade electric locomotives.
* Asia's largest MedTech Zone (AMTZ) has been set up in Andhra Pradesh.
* 88 cold chain projects were commissioned from June 2014 to August 2018, thereby
creating an additional food processing capacity of 3.9 lakh tonnes.
* Three textile mega clusters in Bareilly, Lucknow, and Kutch were in the development
phase which could benefit 14505 artisans.

30
 * Major ports in India have added capacity of 92.19 MTPA during FY 2017-18. Total
turnaround time at these ports has reduced by 33% from 96 hours in FY 2014-15 to
64.32 hours in FY 2017-18.
* FDIs in the service sector is $3.5billion, more than three times that of the
manufacturing sector which shows the Indian economy's traditional strong points of
having remarkably developed computer services.
* India's share in the global exports of manufacturing products remains around 2%
which is far less than 18% share of china.
* The growth rate of manufacturing averaged 6.9% per annum between 2014-15 and
2019-20 and later showed high growth in 2022 with 11.4%. The share of
manufacturing dropped from 16.3% of GDP in 2014-15 to 14.3% in 2020-21 and will
increase to 17% in 2022.
* The import of toys in FY21-22 has reduced by 70% to USD 110 Mn (Rs. 877.8 cr).
India's export of toys registered a tremendous growth of 636% in April-August 2022
over the same period in 2013.
* The Production Linked Incentive (PLI) scheme across 14 key manufacturing sectors,
was launched in 2020-21 as a big boost to the Make in India initiative.
* According to the data provided by Indian Cellular & Electronics Association (ICEA),
the initiative saved Rs. 3 lakh crore of possible outflow in the last four years, by
replacing the import of completely built units (CBUs) with domestically
manufactured and assembled handsets.
* In the last two years, the country has successfully climbed 53 places in Ease of Doing
Business rankings.

SUMMING UP AND TAKEAWAYS

The modern idea of Make in India is more than a century old. Economists and entrepreneurs
of yesteryears like Ranade and had understood the importance of skill building, capital, and
domestic production. The colonial government though, was not on their side. Today,
economists and entrepreneurs seem to be ably supported by the will of the Central and state
governments, and that too with a changed paradigm of economic development. One caveat
needs to be remembered though. In the past, only three countries have demonstrated a
sustained GDP growth rate of more than 10% for at least 2 decades at a stretch. They are
South Korea, China, and taiwan. And, none of them was a democratic during their long
respective stretches! India has been and will remain a democracy. To Quote Dr. C.D
Deshmukh (1956) from his consecutive 6th union budget speech inaugurating the second-five
year plan:

* The sanction behind the (2nd Five-year ) Plan is not the will of Government but the
will of the people.
* Democracy is for us a means as well as an end. it defines our objective, and it
indicates the approaches and techniques to be adopted for the fulfillment of the

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 objective.

The make in India theme popularized by the current government must be viewed in that light.
The argumentative democratic approaches and techniques will decide how long it takes for
India to accomplish the economic goal. Yes, a country is not a company; however, learning
from experiences of entrepreneurs who have succeeded within the stifling democratic milieu
of a developing country can give a fillip to actualisation of the Make in India theme.Through
this policy paper, we have elicited most of the started and quite a few intended economic
prescriptions that emanated from the talks given by the four speakers at the forum offered by
PIC and MCCIA. Galvanisation of their prescription by economic theory renders us the
policy takeaways as listed below. Quite a few of them are aimed at increasing manufacturing
activity by removing inefficiencies arising out of the past and existing policies; and, other are
aimed at improving dynamic comparative advantage through innovation transformation:

1. Over the decades India's private sector has matured. Government must nurture and
allow space to the private sector which has hitherto been cornered by PSUs, albeit
inefficiently. For example, Bharat Forge has demonstrated that Indian companies can
deliver in the heavy engineering and defense sector provided they get the assured
threshold levels of sales orders and that procurement regulations are not archaic,
which many times favor foreign companies being vendors to the government. PSUs
have to be privatized in a phased manner.
2. Private sector will get a fillip in the manufacturing sector the sooner all indirect taxes
get replaced with one GST regime. GST is a destination based tax and hence Indian
companies will become competitive in the world market as excise duty will be done
away with. Recently, however, the government has announced four different rates for
GST with additional cess on luxury and demerit goods. It is suggested, as explained in
the paper earlier, that there be just one GST rate. Moreover, the Central government
may want to rethink the 100% compensation that it has agreed to for states for any
loss of revenue under the new regime. This will avoid the moral hazard problem for
states, for currently they are dis-incentivised to exert themselves and be efficient in
revenue generation.
3. Similarly, in the case of direct taxes, it turns out that the world average for corporate
tax rate is only 24%. India may want to lower the corporate tax rate from its existing
rate of 34.61% and bring it down to 25%. This will be a big boost to incentivise
entrepreneurial class.
4. While China's gross savings rate is 50% of GDP, India's is about 32%. To enhance
domestic investments through domestic savings, fuller financial inclusion through
JanDhan and Adhar, promotion of SIPs in mutual funds, and promotion of GMS may
be speeded up. In the meantime, FDI is encouraged, especially in diverse product
categories such as electronic gadgets, power-plant equipment, semiconductors,
navigational radars, optical mediums, medical equipment, aerospace, defense, and
technology hardware equipment, where India does not even have a minimal presence.
In wholesale and retail FDI, we may do away with too many administrative buckets
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 such as allowing 50 or 100 percent FDI, single or multi brand FDI, and ease domestic
procurement norms.
5. Central and state governments may amend, as has been done by states such as
Rajasthan,IDA 1947 to exempt companies employing 300 workers or less from
government approval for worker retrenchment. Similarly, Factories Act 1948 could be
modified to allow 100 hours of overtime in a quarter.
6. Retirement for union formation will be raised to at least 30 % of the workforce.
Weekly-offs for workers may be staggered over different days in groups of companies
in an industrial belt so that power-outages are avoided and production does not halt.
Moreover, for many other labor laws, state governments may want to initiate
self-certification by companies with random checks of once in 5 years. Such moves
will reduce the transaction cost of companies significantly.
7. For speedy progress in infrastructure projects and industrial expansion, land
acquisition becomes an important prerequisite. Either Central governments and/or the
state governments may introduce amendments to LARR act for acquisition of land for
socially beneficially large infrastructure projects such as affordable housing, roads/rail
network, rural schools/hospitals and national security. Similarly, local and state
governments can streamline and significantly reduce the number of permissions
required for using the lands allotted to companies for industrial production in SIDC
(state industrial development corporations) areas. The amendments to UCLA are used
by state governments to allow either private parties or governments to allow either
private parties or governments to construct urban affordable housing, hospitals, or
schools in urban areas.
8. An important bottleneck used in manufacturing is the availability of power and that
too uninterrupted one. While power generation plants are being privatized, SEB
discoms could also be privatized. This will avoid excess capacity in power generation
on the one hand and inefficient power usage by discoms on the other. Power subsidies
to agriculture and household can be done away with except for a small first block to
carter to destitute population.
9. Ease of doing business can be enhanced by local and state governments by allowing
requests for permits, registrations, and water and power connections through single
window online portals. Similar approach by the central government for granting
licenses and environmental clearances for foreign partner companies has to be
adopted. Similarly, lack of contract enforcement is an important criterion on which
companies are adverse to do business in India. Establishment of commercial courts
for quicker resolution of disputes and government refraining from resolution of
disputes and government refraining from exhuming retrospective taxation issues
would be important steps on these issues.
10. Skill upgradation for manual and vocational labor force could be promoted in addition
to existing ITIs through short-term courses. They could be run through accredited
private or public polytechnic institutes. Getting qualified instructors for such institutes
is always a challenge. Experience of retired personnel from railways and armed forces

33
 can be harnessed for this purpose. There is also a scope for CSR activities initiated by
companies themselves, keeping in mind their future workforce needs.
11. Government and RBI must also provide a stable macroeconomic environment to
Indian companies. Essentially, RBI could maintain competitiveness of Indian
manufactures through 'managed float' of the Indian rupee as it has been doing in the
past. This entails market intervention by RBI when there is a severe risk of real
appreciation of Indian rupee. Related issues are to contain inflation within a range of
4 to 6 %. Any higher inflation severely reduces the competitiveness of Indian
companies in the world market. Finally, as per FFC, by 2019-20 combined fiscal
deficits should be contained within 5.7% of GDP (3% for the Central government)
and a combined surplus of 1 percent on the revenue account. This should address the
issue of crowding of private investment due to higher interest rates associated with
high fiscal deficits.
Assuming that the above reforms are undertaken, India will have to grow at more than
7 percent per year for at least next 10 years to take manufacturing to a threshold level
of 25% of GDP. As the sector begins to approach the threshold, it would catalyze
experienced entrepreneurs to innovate, contributing further to the dynamic
comparative advantage. Here are the pertinent issues in this context:
12. Threshold levels of manufacturing may be a necessary condition for innovations and
improving dynamic comparative advantage, however, that is not sufficient. R&D is an
essential ingredient for innovations. R&D to GDP ratio for South Korea is about 4.7
% and that for India is barely about 0.9%. Perhaps India must at least double the
number in the next 5 years to 1.8%. Moreover, a substantive proportion of R&D has
to happen in the manufacturing sector as has been demonstrated by companies in the
developed world and the East Asian countries. R&D efforts in the private sector
create spillover effects and positive innovation externalities for other companies. The
cost-benefit ratio for R&D in the private sector is very low compared to that in the
public sector. Therefore, governments of developed free-market economies provide
physical support to private R&D efforts. India too could offer Tax incentives for the
private R&D efforts.
13. Theory and empirical research shows that companies operating in competitive
markets invest more in R&D rather than those in monopolistic markets. This has been
demonstrated by Lupin, Praj, and Bharat Forge; where stiff comp-et9ition in foreign
markets disciplined them to spend on R&D. Government will have to promote
competition through unilateral trade liberalization, furthering WTO led trade
liberalization, engaging in free trade agreements such as RCEP, TTP, and FTAAP, and
plurilateral agreements such as TISA. If India does not proactively become part of
these trade agreements, Indian companies may have to forego the benefits of market
access in the rest of the world. In the domestic markets, the Competitions
Commission must be alert to any collusive behavior as was exemplified a few years
ago in the case of the cement industry. Importantly, competition policy must be
applicable to PSUs as well, for PSUs operating without budget constraints distort and

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 create unfair competition to the private sector.
14. Rather than running stand-alone autonomous research institutions, the government
may promote R&D through competitive grants to universities, where interdisciplinary
research culture gets imbibed through graduate students working shoulder-to-shoulder
with faculty members. The recent decision by the Central government to establish 10
world class universities both in the private sector and public sector is most welcome
and the process should be speeded up. In fact, the more serious research happens
within universities, the more companies are likely to demand scientists coming out of
the universities. They are the ones who will further the private R&D initiatives of
companies. And, as mentioned in point number 12 above, fiscal incentives for private
sector R&D will have to be thought through.
15. Finally, propensity to do R&D and innovate is also a function of the internal culture of
the company as exemplified by its management, HR practices, and the quality of
leadership. While these aspects have to be inculcated and need not necessarily be
taught, they can be cultivated through education. There are a few management
institutions which facilitate executive education in entrepreneurial and leadership
roles and provide an incubation environment for innovative ideas. And then, there are
non-governmental foundations like NIF which do similar work. For a country of
India's size, perhaps there is a need for more such institutions.

CHAPTER-5
CONCLUSION

SUGGESTIONS
Based on ends attracted the current investigation which is totally founded on the examination
of auxiliary information, the scientist might want to give the accompanying
recommendations:-

* The need of great importance is improvement and justification of the tax collection
framework with long haul steadiness. Fitting the GST bill, by decreasing state fringe
charges, will have the significant result of making a genuinely public market for
merchandise and ventures, which will be basic for our development in years to come.
* Moreover, labor laws ought to be corrected in such a way that it doesn;t hamper the
enthusiasm of workers. Land securing is fundamental for investment in the
manufacturing segment and subsequently a vigorous land acquisition ought to be
planned so as to facilitate the cycle of land procurement in India.

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 * Moreover everybody ought to be associated electronically and monetarily to the more
extensive framework through mobiles, broadband, and mediators, for example,
business reporters.
* All the administration offices ought to be digitalized to improve the simplicity of
working together. More emphasis ought to be given on fortifying the corporate R&D
movement in the nation to encourage the world wide intensity of public endeavors.
Industrial halls ought to be created by the administration so as to encourage simplicity
of working together.

CONCLUSION
Make in India is an ambitious initiative of the government of India to make India a hub for
global investments and manufacturing. The initiative has the potential to create millions of
jobs, boost the economy, and reduce the burden on the environment by promoting the use of
green technologies. However, the initiative also faces certain challenges, such as inadequate
infrastructure and a lack of skilled labor. Despite these challenges, the "Make in India"
initiative has the potential to bring about a positive transformation in the manufacturing
sector of the country.

The Make in India project is helping to revive the Indian economy by encouraging foreign
investment, creating employment opportunities, promoting innovation, and increasing the
competitiveness of the Indian manufacturing sector. Additionally, it has the potential to
reduce poverty and increase the standard of living in India.

It is right to acknowledge that Make in India has been successful in achieving its promises of
nobel commitments. The dedicated site and easy mechanism for registering a business are
what made India take multiple strides in its ranking across various indices of economic
growth.

OUR VIEWPOINT - WHAT WE WANT

* Sustainability- Short, Medium & Long Term
* Principle of Coexistence with Nature
* Innovations and Creativity
* Gainful Productive Employment
* Dignity of Labour & Equality
* Self Reliance, Sovereignty & Leadership
* Export Surplus Nation

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