Abstract
The mission of Make in India is in place in India since 2014. It is a macroeconomic industrialization drive with programs and projects within in India, by the people of India, and for India. It is also a program to show case the world that Indian manufactured goods are as good as made anywhere in the world, if not better. A large number of products and services are conceived under this mission. ‘Make in India’ is an invitation to foreign and Indian manufacturing firms to invest and produce in India, with or without foreign but modern technologies and capital investment flows, using domestic labour force. The program demands several major shifts in policies and strategies at public and private sector levels, and government administrative structures, such as emphasis on drastic shift to high level of productivity, pushing programs on job skill developments, promoting labour-intensive production systems, creating an atmosphere for boosting exports purely on a competitive basis with several reforms on ‘ease of doing business’, creating opportunities for infrastructural development with reforms in FDI regulations, and providing congenial financial and credit facilities with several fiscal and monetary policy reforms such as gradual withdrawal of subsidies, or reducing lending interest rates. This paper concentrates only on the economic aspects of Make in India mission. After explaining the economic logic and reasons for this mission, the paper in several sections points out to the major challenges to operationalize the mission. It ends with issues in implementing the mission and possible policy guidelines towards implementation.
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Notes
- 1.
Several variants of this mission are: ‘Buy and Make’, or ‘make within India only’ as against ‘Total Buy’ option. These are self-explanatory alternative options to be tried out. The ‘Buy and Make’ option stands for buying some intermediary equipments and materials and making further processing and assembly within India by Indian firms.
- 2.
Several specific conditions are however in place.
- 3.
See: www.makeinindia.com for sectoral spreads, new initiatives, policies, skill development, etc.
- 4.
Indian Current Account Trade Balance has been negative all through the last 50 years, negatively declining in recent periods at the rate of about Rs. 135 billion annually. The trade deficits currently are of the order of US$22 billion, and multi-lateral, bilateral, and IMF debt outstanding is of the order of US$84 billion in 2014–15.
- 5.
The share of FDI in GDP in India was 1.29% in 2012, as against a significantly higher 3.08% in China.
- 6.
Economic Survey, 2016–17 warns that, “Given that India’s growth ambitions of 8–10% require export growth of about 15–20%, any serious retreat from openness on the part of India’s trading partners would jeopardize those ambitions” (p. 6). Chapter 8, Table 7 shows negative growth in most of the traditional exports.
- 7.
Later, in the same book he argued for the need of ‘military personnel and establishment as a separate entity from citizenry and other civilian activities’ (a distinct societal arrangement from ancient system of hunters and gathers also being warriors). According to him, ‘Evolution of Army as a separate from Civilians, and delegating responsibility for civilians to pay taxes and soldiers to protect the citizen’ are the institutional framework for promoting the wealth of nations. That certainly is an economic argument of paying for national security and integrity.
- 8.
Several options under ‘Make in India’ on defence procurement requirements, namely Buy, Buy and Make, and Make are known.
- 9.
Some successful stories on these are ceramic and pottery making hub in Khurja in Uttar Pradesh; textile and knitwear hub development in Tirupur in Tamil Nadu; or dairy development in Khaira district of Gujarat and so on.
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Kadekodi, G.K. (2018). Make in India: Policy Drives and Challenges. In: Annigeri, V., Deshpande, R., Dholakia, R. (eds) Issues in Indian Public Policies. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-7950-4_4
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