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Make in India Scheme: Advantages, Challenges and Sectors of Make in India

Shubham Chauhan

| Updated: Dec 09, 2019 | Category: Startup

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India is one of the fastest-growing trillion dollar economies in the world. India recently lost its first spot of the fastest-growing economy to China after the economy grew slowly than expected in the first three months of 2019. As per the official data, the economy of India grew at a rate of 5.8%, which is less as compared to China’s economic growth of 6.4%. During the first term of the Modi government, India became the fastest growing economy in the world . However, the second term of the government saw a decline in the growth of the economy.

The BJP-led NDA government launched the Make in India Scheme during its first tenure which was one of the reasons leading to an exponential increase in the economy of the country. The aim of launching this scheme is to enhance skill development, build manufacturing infrastructure, attract investment from around the globe and use India’s talent to its full potential. Make in India focuses on twenty-five sectors which include automobiles, aviation, chemicals etc. In this article, you will get a complete overview of Make in India scheme; its benefits, disadvantages and different sectors of Make in India.

The onset of Make in India

Prime Minister Modi, in his maiden Independence Day speech, talked about the idea of Make in India. Prime Minister during his speech, urged the people of the whole world to come and Make in India. He focused on the skill, talent, discipline and the desire to work of youth dominated population of India. He asked the people around the globe to come and manufacture in India and sell in any part of the world as per their wish. The program was formally introduced on September 25, 2014, by the Mr Narendra Modi at Vigyan Bhawan, New Delhi.

This initiative, launched by the Government of India, has become the most significant and fastest-growing government initiative with over 2.1 billion global impressions on social media. The logo designed for the Make in India campaign is an elegant lion, which is inspired by the Ashok Chakra and depicts development and success in all spheres. The Prime Minister of India dedicated this campaign to Pandit Deen Dayal Upadhyaya who was an eminent patriot and a famous political personality. The official launch date of Make in India initiative, i.e. September 25 is the birth date of Pandit Deen Dayal Upadhyaya.

The vision behind Make in India Initiative

The manufacturing sector of India contributes just over 15% to the nations GDP. This initiative launched by the government focuses on growing the contribution of manufacturing sector up to 25% to the nations GDP which will bring India at par with the developed nations of the world. The vision behind Make in India is to boost the manufacturing sector of the country, create employment opportunities and to simplify the ease of doing business in India. Make in India initiative recognises ‘ease of doing business’ as one of the most important factors to promote entrepreneurship. Apart from ease of doing business, there are various other factors which affect the growth of the manufacturing sector such as infrastructure, the mindset of people and many more. Make in India plans to change the relationship between government and industries by bringing a standard shift in how the Government interacts with industry.

Different Sectors of Make in India

The government has identified 25 sectors of Make in India that needs to be promoted adequately. These 25 sectors of make in India are likely to have the highest Foreign Direct Investment (FDI) and the government intends to ease the procedure of investment. The government plans to create an environment in which foreign investors would readily come to India to invest in various sectors of Make in India like Railways, Medical Services, Defence, Insurance and other sectors. Following are the 25 sectors of make in India initiative:

Automobiles Electronic Systems Ports
Automobile components Food processing Railways
Aviation IT and BPM Renewable Energy
Biotechnology Leather Roads and highways
Chemicals Media and Entertainment Space
Construction Mining Textiles and garments
Defence manufacturing Oil and Gas Thermal Power
Electrical Machinery Pharmaceuticals Tourism, Hospitality and Wellness

Advantages of Different Sectors of Make in India

At present India has a large workforce to cater to the needs of foreign investors. Skilled labour is easily available in our country because of the high rates of unemployment. All these factors have developed India as an outsourcing hub of the world. Numerous measures focusing on the ease of doing business in India have been launched under the Make in India program.  Government has launched a number of new initiatives to ease the licensing rules at the state government level to align them with global best practices. This initiative of the government is helping in skill development, driving foreign investment, encouraging innovations and above all providing employment to the unemployed youth of the nation.

Some of the achievements under Make in India initiative

Foreign Direct Investment (FDI)

The Government of India amended the FDI policy in 2014 to increase the FDI inflow. The government increased the foreign investment upper limit from 26% to 49% in insurance sector. After the introduction of Make in India initiative, government liberalized FDI in some key sectors including Telecommunications, Agriculture, Pharmaceuticals, Civil Aviation, Space, Insurance and Pensions and Medical Devices etc.

Ease of Doing Business

Recently India climbed 14 ranks in the World Bank’s annual report on Ease of Doing Business, ‘Doing Business 2020’. This sharp rise in the position of the country can be attributed to reforms brought in the different sectors of Make in India.

Achievements of Different Sectors of Make in India

Aviation Sector

  • FDI grew 6 times from $93 million (2011-14) to $ 519 million (2014-17)
  • Passengers carried by domestic airlines increased by 29% from 148 million (2012-14) to 191 million (2014-16).
  • Government-approved 6 greenfield airports.
  • Around 160 airports are being revived and operationalised.
  • 16 Common User Domestic Cargo Terminals (CUDCT) have been operationalized.
  • The government launched the GPS-Aided Geo Augmented Navigation system (GAGAN)

Basic Metals and Cement

  • FDI grew 4.43 times in Mining Sector from $293 million (2011-14) to $1297 million (2014-18)
  • Government-commissioned India’s largest blast furnace named Kalyani blast furnace at SAIL, Burnpur.
  • Government has also taken steps to modernize Rourkela steel plant to enhance the capacity of the plant from 2 million tonnes per annum to 4.5 million tones per annum.

Biotechnology

  • India launched first indigenously developed and manufactured Rotavirus vaccine named ‘Rotavac’
  • During the course of Make in India a virtual centre was launched across 5 IITs to develop advance technologies in the area of bio fuels.
  • Government has decided to set up Asia’s largest MedTech Zone (AMTZ) in Andhra Pradesh. This MedTech Zone will host around 200 independent manufacturing units.

Tourism

  • The Ministry of tourism launched Swadesh Darshan Scheme for integrated development of theme based tourist circuits in the country in 2014-15. This scheme launched by the government aims at positioning tourism as a major source of economic growth and job creation.
  • Another scheme launched by the Ministry of Tourism is PRASAD. This scheme aims at development of religious tourism.

MSME

  • The Government of India launched a new scheme named Prime minister’s Employment Generation Programme (PMEGP).
  • Government approved Rs 139.58 crore for clusters to provide employment to artisans across 72 clusters.
  • A new portal named ‘Samadhaan’ was launched to provide information regarding the payments pending with Central Ministries.

Challenges of Make in India

The bureaucratic approach of governments of India has always made it difficult for foreign investors to set up industries in India. Apart from bureaucracy, other factors such as corruption, lack of proper infrastructure and not so good labour laws refrain investors from investing in India. However, the current Modi government under the Make in India scheme is trying its best to eradicate these issues from the country and develop the country as an outsourcing hub.

India’s rank in ‘ease of doing business index’ is not so good and this is one of the universally noted disadvantages of investing in India. Even the current government is often questioned regarding the poor labour reforms in India which ultimately affects the Foreign Direct Investment in the country. Several tech companies are still not interested in the Make in India campaign and continue to manufacture their components in China.

Conclusion

Make in India initiative focuses on enhancing skill development, build manufacturing infrastructure and make India a global manufacturing hub. This scheme launched by the government intends to attract investments from across the globe and create employment opportunities for the youth of the country. There are about twenty-five sectors of Make in India initiative that needs to be promoted to cater to the needs and demands of foreign investors. All in all, this is an excellent initiative taken by the government of India which is aiming at the overall development of the nation. However, there is a need to reform the labour laws, curb corruption and remove bureaucracy from the country to make India more feasible to invest in and start a new business.

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Shubham Chauhan

A passionate legal content writer, a nature enthusiast, an avid reader, and a part-time thinker. By means of conducting in-depth research on industry related topics, Shubham often builds flawless and intelligible legal content for populace from all walks of life.

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