MAKE IN INDIA, HOPE OR DESPAIR?

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Indian workers set up the venue for the 'Make in India' showcase week in Mumbai on February 11, 2016. Over 190 companies, including national conglomerates and multinational corporations, 5,000 delegates from 60 countries, and leading industrialists including Ratan Tata and Mukesh Ambani will be participating in the maiden 'Make in India' showcase to be held in Mumbai from February 13-18. AFP PHOTO/ INDRANIL MUKHERJEE / AFP / INDRANIL MUKHERJEE (Photo credit should read INDRANIL MUKHERJEE/AFP/Getty Images)

By Shukla Maity from Surendranath Law College, Calcutta University

“It always seems impossible until it’s done.” -Nelson Mandela.

INTRODUCTION

India converted a dreadful disaster into an opportunity. Recalling the Shastras, the imperativeness of self-reliance has been put forward by our Honourable Prime Minister. As the Covid-19 outbreaks, the world is lately focusing towards the humanity centric globalisation, whereas India sees an opportunity to lead the way. For India to be a global competitor, such self-reliance is conducive. While emphasising towards India’s ancient culture and wisdom of age old principles, like ‘VASUDAIVA KUTUMBAKAM’, which means ‘the world is one family’, the harmonious relations with nature ensures that the progress of the world is central to India’s perception towards progress.

MAKE IN INDIA 1.0

In September, 2014 the ambitious policy of ‘ Make in India’ was introduced by our Honorable Prime Minister where the utmost importance was given to the National Manufacturing Policy which aimed towards increasing the shares of the country’s GDP from 16% to 25% by 2022 (revised to2025), the creation of 100 million job opportunities in the manufacturing sector. The policy sets out 11 concentration areas and 25 focus areas, increase in domestic value addition and technological depth in manufacturing. In February, 2016, the Prime Minister announced ‘MAKE IN INDIA WEEK’, this week was set apart and during this week the Prime Minister dealt with the manufacturing agenda and made various declarations on the progression of the Make in India programme. 

Targets set out:

  1. Attracting Foreign Investment
  2. Cutting down commercial imports
  3. Encourage domestic production

As the first target was to attract Foreign Investment, in the light of this initiative, radical changes were made in the Foreign Direct Investment (FDI) policy. Liberalisations were given and the Foreign Investment Promotion Board (FIPB) was abolished which led  the FDI sector to grow up to 23% in the initial two years and which in turn led to the becoming of the Indian economy one of the most open economy in the world.

The second target was to cut off the commercial imports. For any economy to grow, it is of critical importance that its imports are checked and exports are encouraged or it shall suffer a huge trade deficit. The import of goods and commodities in India happens to be around $500 billion on an average, whereas the exports from our country thereby happens to be around $321 billion only. India suffers a trade deficit of around $1.5 billion which leads to the current account deficit and which in turn affects the value of currency. In this deficit caused to India, there is a major role of ‘Made In China Products’. According to a data of 2018-2019, the imports from China caused a trade deficit of around $90 in itself, which is causing 53.6% of the overall deficit as the import of $70.3 billion subjugated the mere export of $16.7 billion. No significant improvements have been seen in this area but the outbreak of Covid-19 has led to the analysis upon these unflattering accounts.

The third target being the keynote for the MII is to encourage the domestic production, since ‘Make in India 1.0’ was launched  in 2014, India primarily became the assembly hub for the industries such as mobiles phones, lighting and consumer electronics, but no such significant changes has been sensed for the domestic manufacturers. And here the ‘Make in India 2.0’, in post-Covid period comes into play, which was declared by our Honourable Prime Minister on the eve of 2nd June, 2020, in the midst of the pandemic. It emphasises onto the protection of domestic manufacturers and push them up the value chain and it is likely to press the accelerator on vertical integration, where the component of the supply chains are ought to be local because of import substitution and the pandemic situation.  

IMPLICATIONS FOR MAKING (MII) A REALITY.

For making MII a reality from a distant dream, it is conducive for the Indian government to play the role of a facilitator, for the poor infrastructure and logistics lead to higher costs. Besides the logistic disabilities in India include higher cost of finances, suffers lack of quality power, land and labour reforms.

However, India has come forward for its own rescue, as the Reserve Bank of India and the Finance Ministry promises that the loan shall be given on low interest. Quality power should be provided 24/7. Besides this, the land law reforms and the labour reforms can play an indispensible role in making ‘Make In India’ a reality and not just a distant dream.

Advanced technology needs to be acknowledged and applied because fighting technology is worthless and shall hinder the growth. The manufacturing policy will be of no use without a legit plan, as plans translate policies into action. And a plan shall include few more focal points such as which sectors would be acting as the key driving force, which countries would play the role of partner for mutually benefiting themselves. Thus, grafting a strategic plan is highly coveted.

Reformation of the rigid and multiple labour laws could prove to be worthy as there are a total of 44 Labour Laws from the Central Government and 160 Labour Laws from the State Government. Because India’s self reliance will not come without the key reforms—land, labour, liquidity, for making the 21st century the century of India, robust policies and legal reforms are requisite.  Honourable Supreme Court on its SUO MOTO  cognisance by three-judges bench upheld that there must be many ‘inadequacies and lapses’ from the part of the State as well as the Central Government in dealing with the migrant workers crisis amidst the lockdown on 26th May. During this period, allowances such as journey allowances, displacement allowances, protection are given under this Act. It provides a shield to migrant workmen and entitle them to wages. The sectors which include obligations on contractual basis with their employers are also liable to provide them with compensation and protection under this Act.

The Micro, Small and Medium enterprises contribute almost 40%  of India’s  export, but due to rigid labour laws they have a tendency to stay small. They are not motivated to expand their businesses. For instance, taking the case study of the garment industry of Bangladesh, the manufacturing industry being of large size, they are able to make benefits from the division of labour, formal credit, labour welfare, etc. and has the chance of growing immensely. This will add on to the exports of that country. A common labour code is required for motivating the small entrepreneurs to expand their businesses.

Land acquisition being a very difficult process in India plays a very significant role in demotivating the entrepreneurs to start up businesses. The solution to this problem could be the setting up of a Land Bank Corporation which shall provide with the detailed audit of the Government land available. This corporation shall keep records of such unused land of the PSUs, railway companies, AAI, defence authority, which shall lead to the accumulation of such unused land and thereafter make such lands available for utilisation, so that the new entrepreneurs can acquire such lands and make a resourceful use of it.

Taking the  case study of  Odisha state government, they have taken this issue of land acquisition into consideration. It has reserved around 60,000 acres of land under the Land Bank Project and the entrepreneurs who wanted to start business were allotted this land at cheaper cost.

This legislation came after Odisha government lost its POSCO investment. In other words, the investors should be incentivised to invest more in businesses.

And also the 25 focus sectors which include FDI policies, IPR, aviation, ports and shipping, roads and highways, construction and defense manufacturing, IT and BPM, thermal power, biotechnology, media and entertainment, electrical machinery and electronic system, leather, railways, space, tourism and hospitality, chemicals, mining oil and gas, pharmaceuticals, renewable energy, food processing, textiles and garments and wellness. These sectors are to be given immense attention to make improvisations and negotiation so that these sectors can contribute to the export and help in making ‘Make In India’ a reality.

CONCLUSION

The history shall repeat, the glory shall return.

Ancient India better known as the ‘Golden Bird’ had its annual income more than the entire treasury of Great Britain. History is evident that India was one of the largest economies between 1AD-1000AD with a GDP value of $33.8 million. There are several references of pearls that were presented by Julius Ceaser to Brutus’s mother and the impeccably designed earrings of Egyptian Queen Cleopatra were traded from India. Mauryan vessels sailed as far as Egypt, Syria, and Greek for trading and soon it became a global trade hub. Talking about ‘Make in India’, we don’t mean we are going to be a closed economy, rather the objective is to become a self-reliant entity. The famous ‘Make in India’ logo is itself a lion, a lion’s silhouette filled with cogs, which symbolizes manufacturing national pride and strength.

This initiative invariably shall take time to fully administer in India, but our country will emerge as a resilient unit. We are the ones creating hopes and despair, we are the one who decides if ‘Make In India’ is a reality or a distant dream. Let’s join hands and take oath to condone ‘Make in India’ and ‘Made in India’, and to condemn anything and everything that is susceptible to our future self-reliant entity.

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