Indian Economy

Make in India is a Government of India scheme launched by Prime Minister Narendra Modi in 2014 intended to boost the domestic manufacturing sector and also augment investment into the country. This article comprehensively covers details on objectives, schemes & initiatives under it, 25 focus sectors, advantages, challenges, & progress related to the Make in India Scheme.The government wants to revive the lagging manufacturing sector and spur the growth of the economy. The GOI also intends to encourage businesses from abroad into investing in the country and also manufacture here, by improving the country’s ‘Ease of Doing Business’ index. The long-term vision is to gradually develop India into a global manufacturing hub, and also boost employment opportunities in the country.

For the past two decades, India’s growth story seems to have been led by the services 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% in 2013, it contributed to only 28% 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.

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 neighbours in East Asia. There is an overall trade deficit when it comes to goods. The trade surplus in services hardly covers one-fifth of India’s trade deficit in goods. The services sector alone cannot hope to answer this trade deficit. Manufacturing will have to chip 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.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.

The National Manufacturing Policy (NMP) of India has several objectives aimed at revitalizing the manufacturing sector:

1. ncrease Manufacturing Growth: To increase the growth rate of the manufacturing sector to 12-14% over the medium term.
2. Job Creation: To create 100 million additional jobs in the manufacturing sector by 2022.
3. Skill Development: To develop appropriate skill sets among the rural migrant and urban poor for inclusive growth.
4. Technological Depth: To increase domestic value addition and technological depth in manufacturing.
5. Global Competitiveness: To enhance the global competitiveness of Indian manufacturing through policy support.
6. Sustainable Growth: To ensure the sustainability of growth, particularly with regard to the environment.Both ‘Make in India’ and ‘Start up India’ are ambitious programs with the potential to significantly impact India’s economy. While they have made progress, ongoing efforts are needed to address the challenges and ensure that the initiatives lead to sustainable and inclusive growth.