Make in India is a major government-led initiative aimed at facilitating investment, fostering innovation, enhancing skill development, protecting intellectual property, and constructing world-class manufacturing infrastructure in India. The fundamental goal of this project is to bring in international investment and develop India's manufacturing sector. The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India, is leading the initiative. This article will highlight various aspects of the Make in India scheme which is important for UPSC aspirants.

What is Make In India?

• Make in India is a government of India initiative established in 2014 by Prime Minister Narendra Modi with the goal of boosting domestic manufacturing and attracting foreign investment.
• The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India, is leading the initiative.
• This article covers the Make in India Scheme's aims, schemes and efforts, 25 focus sectors, benefits, problems, and development in depth.

Various Sectors Involved in Make In India

Manufacturing Sector

• This includes Aerospace and Defense, Automotive and Auto Components, Pharmaceuticals and Medical Devices, Bio-Technology, Capital Goods, Textile and Apparels, Chemicals and Petrochemicals, Electronics System Design and Manufacturing (ESDM), Leather & Footwear, Food Processing, Gems and Jewelry, Shipping, Railways, Construction, New and Renewable Energy.

Services Sector

• This includes Information Technology & Information Technology enabled Services (IT &ITeS), Tourism and Hospitality Services, Medical Value Travel, Transport and Logistics Services, Accounting and Finance Services, Audio Visual Services, Legal Services, Communication Services, Construction and Related Engineering Services, Environmental Services, Financial Services, Education Services.

Objectives of Make In India Initiative

• To increase the potential of the manufacturing sector to 12-14% per year.
• To create 100 million additional jobs in the manufacturing sector by 2022.
• To increase the share of the manufacturing sector in the GDP to 25% by 2022.
• Ensure adequate development of skills amongst the urban poor and the rural migrants to foster inclusive growth. To encourage environmentally sustainable growth.
• Enhancing the global competitiveness of the Indian manufacturing sector.
• Various sectors such as railways, insurance, defence, and medical devices were opened up for more Foreign Direct Investment (FDI).

Various Schemes Launched Under Make in India Initiative

Skill India

• Skill India's mission aims to skill at least 10 million individuals in various sectors in India In order to take the Make in India initiative forward to turn into a reality, there is a need to upskill the large human resource available.
• Its importance increases due to the fact that the percentage of formally skilled workforce in India is only 2% of the population.

Startup India

• This program was initiated to build an ecosystem that could facilitate the growth of startups, drive sustainable economic growth, and create large-scale employment.

Digital India

• Digital India initiative was brought in to transform India into a knowledge-based and digitally empowered economy.
• Digital India is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society.
• It gave impetus to E-governance initiatives in India for wider sectoral applications with emphasis on citizen-centric services

Pradhan Mantri Jan Dhan Yojana (PMJDY)

• It was undertaken to ensure financial inclusion and access to financial services, such as banking savings & deposit accounts, remittances, credit, insurance, pension in an affordable manner.

Smart Cities

• It was brought in to transform and rejuvenate Indian cities.
• The goal is to create 100 smart cities in India through several sub-initiatives. It was launched in 2015.
• The cities were given five years to complete the projects under the mission, with the first set of Smart Cities expected to complete in 2021.

AMRUT

• It is known as the Atal Mission for Rejuvenation and Urban Transformation.
• This initiative focuses to build basic public amenities and making 500 cities in India more livable and inclusive.

Swachh Bharat Abhiyan

• It was undertaken by the government for making India a nation promoting cleaner and basic sanitation and hygiene.

Sagarmala

• This scheme aims at developing ports and promoting port-led development in the country.
• It is the flagship programme of the Ministry of Shipping to promote port-led development in the country by exploiting India's 7,517 km long coastline, 14,500 km of potentially navigable waterways and its strategic location on key international maritime trade routes

International Solar Alliance (ISA)

• It is an alliance of 121 countries, most of them being sunshine countries, which are those that lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn.
• This initiative will promote research and development in solar technologies and formulate policies in that regard.

AGNII

• AGNII or Accelerating Growth of New India’s Innovation was launched to achieve the innovation ecosystem in the country by connecting people and assisting in commercializing innovations.

Critical Analysis of Make in India

Make in India's policy improvements aimed to boost three major indicators of the manufacturing sector's growth: investments, output, and employment. As a result, these three indicators can be used to assess the performance of Make in India.

• Investment: Over the last five years, the economy has seen a steady increase in investment. In the manufacturing sector, the slowdown was especially noticeable in capital investments.
  • According to the Economic Survey 2018-19, the private sector's gross fixed capital formation (a measure of aggregate investment) fell to 28.6% of GDP in 2017-18 from 31.3% in 2013-14.
• Output: Only twice between April 2012 and November 2019 did the monthly index of industrial production linked to manufacturing achieve double-digit growth rates.
  • In fact, the data shows that it was 3% or below for the bulk of the months, and even negative for a few.
• Employment: According to a government estimate, India's jobless rate is at its highest level in 45 years. Furthermore, industrial employment has not increased at the same rate as new entrants into the labour market.
• By 2022, the major stated outcomes were to grow the manufacturing sector's proportion of GDP to 25% and to create 100 million extra manufacturing jobs. Clearly, neither has occurred, and both are unlikely to occur by the target year, based on the more pessimistic forecasts for GDP growth.
• Manufacturing's percentage of GDP, which is currently about 15%-16%, is unlikely to rise much in the next two years.

Reasons for not achieving the targets of Make in India

• Make in India was overly reliant on foreign funding and global markets for its investments and products. As a result, domestic production had to be planned around demand and supply conditions elsewhere, which added to the uncertainty.
• It absorbed far too many sectors, resulting in a lack of policy concentration. Furthermore, the majority of sectors on which India's economy is focused lack comparative advantages.
• The twin deficits of fiscal and current account deficits were of greater concern to policymakers. However, they overlooked the economy's third deficit, the Implementation Deficit.
• This has resulted in a situation where the 'ease of doing business' ranking has risen dramatically, yet investments have yet to arrive.
• The investment issue is partially attributable to the economy's declining savings rate and partly owing to the banking sector's nonperforming assets (NPA) crisis.
• Furthermore, a 12-14% annual growth rate is significantly above the capacity of India's industrial sector.
• India has never achieved this rate of industrial growth before, and expecting Indian firms to establish capacities for such a quantum leap is perhaps a great overestimation of their implementation capacity.
• Furthermore, the global economy's uncertainties, as well as rising trade protectionism, jeopardise Make in India's success.
• FDI inflows to India are primarily oriented to the capital markets, despite the fact that India is one of the world's top FDI destinations, with inflows of $49 billion in 2019. In 2019, manufacturing FDI was barely around $8 billion.

Make In India 2.0

• Some newer sectors have been added that have the potential to become global champions and drive double-digit growth in manufacturing in the coming years such as capital goods, Auto, Defense, Pharma, Renewable energy, Biotechnology, Chemicals, Leather, Textiles, Food processing.
• For the manufacturing sector, plans are coordinated by the Department for Promotion of Industry and Internal Trade (DPIIT) while the Department of Commerce is coordinating service sectors.

Conclusion

The make in India initiative was launched to encourage manufacturing in India and ultimately transform India into a global hub for the same. This would result in increased economic growth as well as employment generation, and also increase the FDI in India. Various sub-schemes has been envisioned under this initiative that would help in the development of various sectors.