The Make in India initiative was taken by the Government of India in 2014 with an aim to transform India into a global design and manufacturing hub. This initiative facilitates investments, skill development, encourages innovation, and protects intellectual property rights to achieve this objective. Both State and Central governments are equally involved in this scheme to attract investments from across the world to strengthen India’s manufacturing sector. The main ministry which works behind this initiative is the Ministry of Commerce and Industry’s Department of Industrial Policy. 

This topic Make in India UPSC is one of the important topics for UPSC Civil Service Examination. Read the entire article Make in India UPSC to know all about the initiative.

What is the Make India Program?

The Make in India program is a big push by the Indian government to turn the country into a global manufacturing hub. Launched in 2014, it aims to attract foreign investment. It aims to boost domestic production across 25 key sectors like automobiles, electronics, and pharmaceuticals. Think of it as a giant "Open for Business" sign for manufacturers worldwide. The initial optimism surrounding the potential of BRICS Nations (Brazil, Russia, India, China, and South Africa) had waned, and India found itself labeled among the 'Fragile Five.' Global investors engaged in discussions about whether the world's largest democracy posed a risk or an opportunity. With its 1.2 billion citizens, there was widespread doubt about whether India was too vast to thrive or too immense to avoid failure. The nation teetered on the edge of significant economic setbacks, urgently requiring a substantial push for recovery.

Objectives of the Make in India Scheme

• The main motto behind this plan is to enhance the manufacturing sector’s growth rate to 12-14% per annum in order to increase the sector’s share in the economy.
• This plan targets 100 million additional manufacturing jobs in the economy by 2022.
• This plan also targets a contribution of 25% GDP from the manufacturing sector’s by 2025 from the current GDP of 15-16%.

Study about Digital India here.

Sectors Included Under the Make in India Scheme

Some of the common sectors which are included under make in India scheme are listed below:

• Automobiles
• Ports and shipping
• Leather
• Media and entertainment
• Wellness and healthcare
• Aviation
• Chemicals
• IT and BPM
• Renewable energy
• Roads and highways
• Space
• Thermal power
• Bio-technology
• Electronic system
• Food processing
• Textiles and garments
• Pharmaceuticals
• Construction
• Defence manufacturing
• Electrical machinery
• Mining
• Oil and gas
• Tourism and hospitality
• Railways
• Automobile components

Also, study about the Skill India Mission from the linked article.

Factors on which the Success of Make in India is Dependent

The three major factors on which the success of Make In India is dependent are listed below:

Investment

In the last five years we have noticed the slow growth of investment in the economy and this reducing data is more in the manufacturing sector compared to the other sectors. According to data from the Economic Survey 2018-2019, Gross fixed capital formation of the private sector reduces to 28.6% of GDP in 2017-18 from 31.3% in 2013-14.

Output

Based on the monthly index it was traced that industrial production pertaining to manufacturing has registered double-digit growth rates only on two occasions during the period April 2012 to November 2019. As per previous data it was listed that earlier it was 3% or below and even negative for some months.

Employment

As per the data of the government, the unemployment rate in India is highest in 45 years. Though there is no such tremendous growth in the industrial employment rate to keep pace with the rate of new entries into the labour market.

Also, study about the Pradhan Mantri Mudra Yojna from the linked article.

Initiatives under the Make In India Scheme

A list of initiatives under Make in India have been taken to make the vision come true. A list of them has been provided below

• Various sectors like railways, insurance, defense, and medical devices have been opened up to accept Foreign Direct Investment (FDI).
• The maximum limit in Foreign Direct Investment in the defense sector has been increased from 49% to 74%. This was announced by Finance Minister Nirmala Sitaraman on May 16, 2020.
• 100% FDI under the automatic route has been permitted under the construction and specified rail infrastructure projects.
• An Investor Facilitation Cell has been set up that assists investors from the time of their arrival in India to their departure from the country. This was created in 2014. It aims at giving various services to investors in all phases such as the pre-investment phase, execution, including after delivery services.
• Steps have been undertaken to improve India’s ‘Ease of Doing Business’ rank. As a result, India gained 23 points in the Ease of Doing Business Index to 77th place in 2019. It also became the highest ranked in South Asia in this index.
• Portals like Shram Suvidha Portal, eBiz portal, etc. have been launched. The eBiz portal provides a single window access to 11 government services related to starting a business in India.
• To improve ease of business, various permits and licenses required to start a business have been relaxed. Reforms are also done in sectors like property registration, payment of taxes, getting power connection, enforcing contracts, and resolving insolvency.
• Apart from it, there are other reforms are undertaken as well like easing the licensing process, time bound clearances for applications 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 also aims to improve the physical infrastructure of the country mainly through the PPP (Private Public Partnership) model of investment. Several ports and airports of the country thus, have seen increased investment.
• The government also has plans to create 5 industrial corridors spread across the length and breadth of India. A strategic focus has been given on inclusive development in order to augment industrialization and urbanization in a planned manner. The corridors are:
  • Delhi-Mumbai Industrial Corridor (DMIC)
  • Amritsar-Kolkata Industrial Corridor (AKIC)
  • Bengaluru-Mumbai Economic Corridor (BMEC)
  • Chennai-Bengaluru Industrial Corridor (CBIC)
  • Vizag-Chennai Industrial Corridor (VCIC)

Learn more about the International Solar Alliance!

Key Schemes under the Make In India Program

To support the Make in India campaign, there are various key schemes launched by the Government of India. Some of these schemes are as listed below:

Skill India Mission

Skill India Mission aims to skill the population of India in various sectors. This scheme was launched to upskill the large population of the country. The people of a country need to have the required skills in order to step forward in this advanced world. India harbors a huge population, so there is a need to provide them with appropriate skills as well, especially when the percentage of formally skilled workforce in India is only 2% of the population. The programme aims to increase this percentage by implementing various skill development programmes across the country.

Startup India

This programme aims at developing an ecosystem to support the growth of startups, create employment via them, and generate sustainable economic growth. Under Startup India, various relaxations have been introduced for the entrepreneurs.Startup India has a 19 Point Action Plan, some of which are

• Self-certification Compliance
• Single Point of Contact via Startup India Hub
• Simplifying Processes with Mobile App and Portal with regard to registration, filing compliances and obtaining information.
• Legal Support, Fast Tracking and 80% reduction in patent registration fee
• Relaxed Norms of Public Procurement
• Easier and Faster Exit

Digital India

Digital India focuses on making India a fully digital economy by letting people avail many services online. It also lets people access the internet hassle free at affordable rates. Some of the digital architectures that are established under this scheme are:

• Bharat Interface for Money (BHIM)- Makes payments quickly, easily, and simply through the Unified Payment Interface (UPI) framework. It also allows various banks across the country to accept instant payments and money collections using mobile phone numbers without the internet.
• Mygov.in – Allows users to voice their thoughts on the government’s administration strategy. This has been made so that every citizen may actively participate and make their voice heard.

Pradhan Mantri Jan Dhan Yojana (PMJDY)

This scheme aims at bridging the financial inclusion gap between different sections of people by making various banking services like savings and deposit accounts, remittances, credit, insurance, pension accessible to everyone easily. Under the scheme, 44.05 Crore beneficiaries have been banked so far. This scheme also provides Accidental Insurance Cover of Rs.1 lakh under Rupay Scheme. The beneficiaries also get an Overdraft Facility.

Smart Cities

Smart cities will transform Indian cities to drive economic growth and improve the quality of life of the local population by enabling regional development. The government aims at creating 100 smart cities across the country. It was launched on 25 June, 2015 by Prime Minister, Narendra Modi. Some of the important infrastructure elements would have adequate water and electricity supply, sanitation, solid waste management, efficient urban mobility and public transport, affordable housing, robust IT connectivity and digitalization.

AMRUT

AMRUT stands for Atal Mission for Rejuvenation and Urban Transformation and has planned to build basic public amenities across the country. Thus, 500 cities in India will be made more livable and inclusive.

Swachh Bharat Abhiyan

This mission aspires to make the nation cleaner and promote basic sanitation and hygiene. More than 51,000 volunteers have taken active participation in making this mission possible. The aim of the programme was that by 2 October 2019, on the auspicious 150th birth anniversary of Mahatma Gandhi, over 100 million toilets in rural India would have been constructed in the country.

Sagarmala

Sagarmala is a port related scheme. It aims to enhance the performance of the country’s logistics sector by developing ports and promoting port related development in the country. Under this scheme, several ports are being constructed and renovated.

International Solar Alliance (ISA)

Headquartered in Gurugram, this is an alliance of the countries that mostly lie in the temperate zones. This alliance is led by India and aims at promoting research and development in solar technologies. It also aspires to increase the deployment of solar energy technologies among member countries.

AGNII

AGNII stands for Accelerating Growth of New India’s Innovation. It was launched to develop the innovation ecosystem in the country. It aims at connecting people and assisting in commercializing innovations.

Also read: Priority sector lending for UPSC here!

Success of Make in India initiative

• Six industrial corridors are being built in different parts of the country. Along these corridors, industrial cities will emerge.
• Between April 2014 and March 2017, total FDI into India amounted to roughly 33% of total FDI into India since April 2000.
• For the first time in any fiscal year, FDI inflows exceeded US$ 50 billion in 2015-16, while FDI inflows set a new high of US$ 60 billion in 2016-17. From April 2000 to March 2018, cumulative FDI inflows totaled $546.45 billion (including equity inflows, invested earnings and other capital).
• In 2017, India remained the most attractive destination for greenfield FDI in the world.
• India’s rank in the World Bank’s ease of doing business rankings has improved steadily from 142 in 2014 to 100 in 2017. This is due to measures to boost business confidence.
• To stimulate industrial growth, five industrial corridors and 21 new nodal industrial cities are being constructed.
• The Insolvency and Bankruptcy Code 2016 combined all insolvency rules and laws into a single law, putting India’s bankruptcy code in line with international best practices.
• In May 2016, the Indian government announced a comprehensive National Intellectual Property Rights (IPR) policy to encourage creativity and innovation in the Indian economy.

Learn more about the International Solar Alliance!

Challenges Faced by the Make in India Scheme

Some of challenges which are faced by make in India scheme are listed below:

Investment from shell companies: Major chunk of FDI inflow comes from Mauritius-based shell companies as these companies are suspected to be investing black money from India. FDI inflow is neither from foreign nor direct. Major drawback behind this is low productivity of India and insufficient skill of the labour force.

• Small industries: The unit of industries are very small and because of this it cannot attain the desired economies of scale. As these small industries do not have funding to use modern equipment and develop supply chains.
• Complicated labour laws: The major factor behind the failure of small industries are the complicated labour regulations for units with more than 100 employees. Before the industry can lay off the employees the government’s approval is required under the Industrial Disputes Act of 1947 before the industry can lay off the employees.
• Electricity: If we compare between India and China, the cost of electricity is almost similar, but outages are far higher in India than China.
• Transportation: The transportation speed of India and China is different as in China it is 100 km/hour whereas in India it is 60 Km/hr. This leads to loss in the transportation expenditure.
• Bureaucracy: India’s bureaucratic procedures and corruption within the government pulls India down in case of attractivity of investors. Though India is ranked 77th among 190 nations in the World Bank’s Ease of Doing Business Index (EDB index) , its performance is still down.

Make In India 2.0

• Since its launch, Make in India initiative has made significant achievements and presently focuses on 27 sectors under Make in India 2.0.
• Aim: To make India a global hub for manufacturing, research and innovation. Also, the integrations of India in the global supply chain.
• Sectors focused: Make in India 2.0 focuses on 27 sectors with a special focus on ten champion sectors including;
  • capital goods,
  • auto,
  • defence,
  • pharma,
  •  renewable energy,
  • Biotechnology,
  • Chemicals,
  •  leather,
  • Textiles,
  • food processing.
• These sectors have the potential to become global champions and drive double-digit growth in manufacturing.
• In manufacturing, the action plans are coordinated by the Department for Promotion of Industry and Internal Trade (DPIIT).
• In services, action plans are coordinated by the Department of Commerce.

Study about the Mid-Day Meal Scheme here.

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