The Impact of Make in India: Is It a Success or Failure?

Introduction

The Make in India campaign was launched in 2014 by the Government of India with the aim of fostering investments, enhancing skills, protecting intellectual property, and building world-class manufacturing infrastructure within the country.

The campaign is executed not just by the central government, but also involves various states, each contributing unique skills and local content. For instance, Karnataka is renowned for its tech-savvy professionals, Andhra Pradesh excels in sourcing materials, and Haryana is well-versed in agritech solutions.

However, the effectiveness of this initiative has been subject to debate. Some argue that while the campaign aimed to boost local manufacturing and job creation, it has struggled to deliver the expected outcomes due to various challenges. This article delves into the successes and shortcomings of the Make in India initiative and assesses its real impact on the Indian economy.

Government Targets and Execution

The Make in India programme is a massive national initiative that was launched on September 25, 2014. The primary goals of the programme include:

Boosting India's economic growth Creating more job opportunities Attracting more foreign direct investment (FDI) Enhancing technological upgradation Protecting intellectual property rights Creating manufacturing infrastructure that is best-in-class

As a result of this initiative, India has seen a significant increase in FDI from around $16 billion in 2013-14 to $49 billion in 2018-19, indicating a substantial growth in foreign investments.

Effect on Different Sectors

The Make in India campaign has had a notable impact on several key sectors in India. Let's explore its influence on some of these sectors:

Mining Sector

In terms of Gross Value Added (GVA), the mining sector has shown growth of 10.5% in 2016-17 and 13% in 2018-19. This growth can be attributed partly to the MAKE IN INDIA initiative, which has encouraged investments and created a supportive environment for the sector.

Electronic System Design and Manufacturing (ESDM) Sector

The ESDM sector has seen considerable progress with around 260 mobile manufacturing units being established in the last five years. These units have created employment opportunities for approximately 40,000 individuals. Moreover, under the Digital Saksharta Abхиyan DISHA programme, around 99.81 lakh candidates have been enrolled for training, which is a significant milestone towards digital literacy. The sector also witnessed a remarkable jump in the total volume of mobiles to 1.57 Lakhs in 2017, highlighting a surge in demand and production.

Food Processing Sector

The food processing sector has come a long way, with the growth rate of GVA increasing from 1.91% in 2013-14 to 10.71% in 2018-19, constant prices. FDI inflow has added to this growth, with a significant USD 2,500 million investment from April 2014 to January 2020. The government has sanctioned 42 mega food parks, which have further contributed to the sector's development.

Challenges and Criticisms

Despite the campaign's success in achieving some objectives, it has faced criticism and challenges. Some argue that the initiative has become counterproductive because of the undue pressure on manufacturers to comply with local content requirements, which can stifle innovation and reduce international competitiveness.

For instance, in the medical equipment sector, manufacturers are required to assemble them locally, which has not reached the desired quality standards. The quality of locally assembled products is declining, and there is no significant upgradation in technology or manufacturing capabilities.

The government's insistence on local content without considering the capability and readiness of the industry has led to frustration among manufacturers. This has resulted in a lack of trust in the initiative and its sustainability.

Conclusion

The Make in India campaign has made significant contributions to the Indian economy through increased FDIs, job creation, and technological upgradation. However, its success is mixed and requires further evaluation to ensure that it meets its ambitious goals. Addressing the current challenges and fostering a more competitive and innovative manufacturing environment will be crucial for the long-term success of the initiative.

Keywords: Make in India, Economic Growth, Manufacturing Infrastructure