Make In India is success or failure?

Make in India :

Back ground :The ‘Make in India’ initiative was launched in 2014 with the objective of promoting India as an important investment destination and a global hub in manufacturing, design and innovation. This initiative aims to create a conducive environment for investment, development of modern and efficient infrastructure, opening up new sectors for foreign investment and forging a partnership between Government and industry through a positive mind set.

Targets :The three major objectives were: 

(a) to increase the manufacturing sector’s growth rate to 12-14% per annum in order to increase the sector’s share in the economy; 

(b) to create 100 million additional manufacturing jobs in the economy by 2022; and 

(c) to ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (revised to 2025) from the current 16%. The policy approach was to create a conducive environment for investments, develop modern and efficient infrastructure, and open up new sectors for foreign capital.

 Some of the major achievements under Make in India initiative are:

•   Six industrial corridors are being developed across various regions of the country. Industrial cities will also come up along these corridors.

•   India has become a net exporter of electricity - 7203 MU exported to Nepal, Bangladesh and Myanmar during 2017-18.

•   One of the world’s largest 648-MW solar power plant 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 locomotive to upgraded electric locomotive.

•   Asia’s largest MedTech Zone (AMTZ) has been set up in Andhra Pradesh.

•   88 cold chain projects were commissioned during June 2014 to August 2018, thereby, creating additional food processing capacity of 3.9 lakh tones.

•   Three textile mega clusters in Bareilly, Lucknow and Kutch are being set up, thereby benefitting 14505 artisans.

•   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 hrs in FY 2014-15 to 64.32 hrs in FY 2017-18.

Draw back of make in India :

Performance :Gross fixed capital formation of the private sector, a measure of aggregate investment, declined to 28.6% of GDP in 2017-18 from 31.3% in 2013-14 (Economic Survey 2018-19).. the public sector’s share remained more or less the same during this period, the private sector’s share declined from 24.2% to 21.5%.

Policy implementation :As the policy changes were intended to usher growth in three key variables of the manufacturing sector — investments, output, and employment growth — an examination of these will help us gauge the success of the policy. But growth, investment, output was declined. 

Underestimation :too much on depend on foreign capital for investments and global markets for produce. This created an inbuilt uncertainty, as domestic production had to be planned according to the demand and supply conditions elsewhere. 

Implementation :The Make in India  initiative brought in too many sectors into its fold. This led to a loss of policy focus. Further, it was seen as a policy devoid of any understanding of the comparative advantages of the domestic economy.Example :the monthly index of industrial production pertaining to manufacturing has registered double-digit growth rates only on two occasions during the period April 2012 to November 2019. In fact, data show that for a majority of the months, it was 3% or below and even negative for some months.

Global impact :the uncertainties of the global economy and ever-rising trade protectionism, the initiative was spectacularly ill-timed with exports and imports.Example :Geopolitical tensions, WTO restrictions, Free trade agreements.