BUSINESS STUDIES (CLASS 11) CHAPTER 1 BUSINESS TRADE AND COMMERCE (TEN YEARS OF MAKE IN INDIA)

  

The contribution of business activities in the growth and development of an economy;

TEN YEARS OF MAKE IN INDIA

The Make in India initiative was launched by Prime Minister in September 2014 as part of a wider set of nation-building initiatives. Devised to transform India into a global design and manufacturing hub, Make in India was a timely response to a critical situation. By 2013, the much-hyped emerging markets bubble had burst, and India’s growth rate had fallen to its lowest level in a decade. The promise of the BRICS Nations (Brazil, Russia, India, China and South Africa) had faded, and India was tagged as one of the so-called ‘Fragile Five’. Global investors debated whether the world’s largest democracy was a risk or an opportunity. India’s 1.2 billion citizens questioned whether India was too big to succeed or too big to fail. India was on the brink of severe economic failure, desperately in need of a big push.

The 4 pillars of Make in India initiative are New Mindset, New Sectors, New Infrastructure, and New Processes. Hence, the Make in India initiative not only aims to boost the manufacturing sector but also other sectors.

The main aim of the Make in India initiative is to make India a global manufacturing hub by encouraging domestic as well as international manufacturing companies to invest in India, manufacture in India and to generate employment in India.

If things are manufactured in India, our people get jobs and our small and micro industries generate employment. If export to other countries increase, money comes to the country and a change comes to the income and economy of the country in a way. With this thinking, Make in India was launched.

The Make in India movement contributes to the Indian economy by boosting industrial growth, attracting investments, creating jobs, reducing import dependency, and enhancing GDP growth rate

"Make in India" had three stated objectives: to increase the manufacturing sector's growth rate to 12-14% per annum; to create 100 million additional manufacturing jobs in the economy by 2022; to ensure that the manufacturing sector's contribution to GDP is increased to 25% by 2022 (later revised to 2025).

In a short space of time, the obsolete and obstructive frameworks of the past have been dismantled and replaced with a transparent and user-friendly system. This is helping drive investment, fostering innovation, developing skills, protecting Intellectual Property (IP) and building best-in-class manufacturing infrastructure. The most striking indicator of progress is the unprecedented opening of key sectors – including railways, defence, insurance and medical devices – to substantially higher levels of Foreign Direct Investment.

Across various regions of the country; six industrial corridors are being developed. Industrial Cities will also come up along these corridors.They are Delhi Mumbai Industrial Corridor (DMIC), Chennai Bengaluru Industrial Corridor (CBIC), Extension of CBIC to Kochi via Coimbatore, Amritsar Kolkata Industrial Corridor (AKIC), Hyderabad Nagpur Industrial Corridor (HNIC).

FAILURES OF MAKE IN INDIA

Make In India statistics paint a disquieting picture. The manufacturing sector in India has declined. The manufacturing growth rate has averaged around 5.9 per cent since 2014, lower than the benchmarked 12-14 per cent, and the share of manufacturing remained stagnant at 16.4 per cent of the GDP.(by January 2024)

India failed to create an international niche market for its products and services.

India did not achieve its targets of increasing the manufacturing sector’s share in GDP to 25% by 2025, creating 100 million additional jobs, and boosting manufacturing growth to 12-14% per annum.

India faced challenges such as policy paralysis, lack of competitive advantage, investment crunch, trade protectionism, infrastructure bottlenecks, labour issues, etc.

As a part of MII, the production-linked incentive (PLI) scheme was introduced with a purpose to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive. The additional goals are like the icing on the cake, but the primary goal of creating jobs for our abundant workforce, particularly women, has not been accomplished This can only be achieved through labour-intensive manufacturing. China’s example suggests the influence of scale in manufacturing for more and more jobs.

The bulk of these schemes relied too much on Foreign Capital for investments and global markets for produce. This created an inbuilt uncertainty, as domestic production had to be planned according to the demand and supply conditions elsewhere.