PIB Summaries 01 October 2024

CONTENTS

1. A Decade of Make in India: Pioneering Economic Growth and Self-Reliance

A Decade of Make in India: Pioneering Economic Growth and Self-Reliance

Context:

Launched by Prime Minister Modi on September 25, 2014, the “Make in India” initiative celebrates its 10th anniversary in 2024. This landmark initiative has significantly reshaped India’s economic landscape, focusing on boosting manufacturing, enhancing global competitiveness, and propelling the country towards self-reliance under the Atmanirbhar Bharat vision. The initiative’s success over the decade highlights its pivotal role in rejuvenating India’s economy and setting a sustainable path for future growth.

Relevance:

GS II: Government Policies and Interventions

Dimensions of the Article:

1. Make in India (MII) Initiative
2. Pillars of ‘Make in India’
3. Key Initiatives under the “Make in India” Program
4. Key Achievements
5. Criticism and Challenges
6. Conclusion

Make in India (MII) Initiative

• Background:
  The Make in India initiative was launched in response to a steep economic decline in India, with growth rates falling to a decade-low by 2013. India, once considered a key player among the BRICS nations, was identified as part of the “Fragile Five,” signaling a need for urgent reforms to revive the economy.
• Need for the Initiative:
  At the time, India’s economic trajectory was at a turning point. Questions arose about whether India was “too large to fail” or in danger of faltering. This made it essential for the country to undertake significant economic measures to regain momentum.

About the Make in India Initiative

• Launch:
  Prime Minister Narendra Modi launched the “Make in India” initiative in September 2014 as a key part of India’s strategy to revitalize its economy.
• Objective:
  The initiative aims to transform India into a global hub for design and manufacturing, creating a robust ecosystem that strengthens the nation’s economic standing and generates employment opportunities. The focus is on encouraging global and domestic companies to manufacture in India.
• Core Goals:
  • Strengthening India’s manufacturing sector.
  • Positioning India as a global design and innovation hub.
  • Enhancing employment opportunities by attracting investments in key industries.

Key Sectors Under Make in India

The Make in India initiative targets 27 sectors, categorized under:

1. Manufacturing Sectors:
   These include industries such as:
   • Aerospace and Defence
   • Automotive and Auto Components
   • Pharmaceuticals and Medical Devices
   • Biotechnology
   • Textiles and Apparels
   • Chemicals and Petrochemicals
   • Electronics System Design and Manufacturing (ESDM)
   • Food Processing
   • Gems and Jewellery
   • Railways, among others.
2. Service Sectors:
   This includes:
   • Information Technology (IT) and IT-enabled Services (ITeS)
   • Tourism and Hospitality
   • Medical Value Travel
   • Transport and Logistics Services
   • Accounting and Finance Services
   • Audio-Visual and Legal Services, among others.

Pillars of ‘Make in India’

• New Processes: The “Make in India” initiative identified ‘ease of doing business’ as a crucial factor for promoting entrepreneurship. Several measures were implemented to enhance the business environment, making it more conducive for startups and established enterprises alike.
• New Infrastructure: The government focused on developing industrial corridors and smart cities, integrating state-of-the-art technology and high-speed communication to create world-class infrastructure. Innovation and research were supported through streamlined registration systems and improved intellectual property rights (IPR) infrastructure. Efforts were made to identify industry skill requirements and develop the workforce accordingly.
• New Sectors: Foreign Direct Investment (FDI) was significantly opened up in various sectors including Defence Production, Insurance, Medical Devices, Construction, and Railway infrastructure. This expansion also included easing FDI regulations in Insurance and Medical Devices, encouraging international investment and growth.
• New Mindset: The government embraced a role as a facilitator rather than a regulator, partnering with industry to drive the country’s economic development. This shift aimed to foster a collaborative environment that supported industrial growth and innovation.

Key Initiatives under the “Make in India” Program

Production Linked Incentive (PLI) Schemes

• The PLI schemes have allocated ₹1.97 lakh crore (equivalent to $26 billion) to 14 key sectors, including electronics, automotive, pharmaceuticals, and textiles.
• By 2024, 755 applications have been approved under these schemes, resulting in investments worth ₹1.23 lakh crore and creating employment for approximately 8 lakh people.

PM GatiShakti Plan

• Launched in 2021, PM GatiShakti is a national infrastructure initiative aimed at improving multimodal connectivity across transportation, energy, and communication systems.
• It integrates 36 ministries and departments to streamline logistics and synchronize project implementation.
• The “seven engines” of GatiShakti include railways, roads, ports, waterways, airports, mass transport, and logistics infrastructure, fostering economic growth and employment.

Semiconductor Ecosystem Development

• To reduce reliance on imported components and boost self-sufficiency in critical technologies, the government introduced the Semicon India Programme with a budget of ₹76,000 crore.

 National Logistics Policy (NLP)

• Unveiled in 2022, NLP is designed to work alongside PM GatiShakti to cut logistics costs, enhance India’s Logistics Performance Index (LPI) ranking, and build a sustainable logistics network.
• The policy focuses on standardizing logistics practices and using digital systems to improve overall efficiency in logistics and human resource development.

Industrialization and Urbanization

• The National Industrial Corridor Development Programme, India’s largest infrastructure project, is focused on developing “Smart Cities” and advanced industrial hubs.
• The initiative promotes manufacturing growth and systematic urbanization through multi-modal connectivity corridors.
• Recent approvals of 12 new projects, with an investment of ₹28,602 crore, enhance India’s role as a global manufacturing hub.

Startup India

• Launched in 2016, the Startup India initiative supports entrepreneurs and nurtures a strong startup ecosystem.
• As of September 2024, India ranks third globally in the startup ecosystem with 148,931 DPIIT-recognized startups generating more than 15.5 lakh jobs.

Tax Reforms

• The introduction of the Goods and Services Tax (GST) in July 2017 has unified India’s tax structure, creating a common market across 36 states and union territories.

Unified Payments Interface (UPI)

• UPI has emerged as a global leader in digital payments, handling 46% of the world’s real-time payment transactions.
• Between April and July 2024, UPI processed transactions worth nearly ₹81 lakh crore, reflecting strong infrastructure and growing consumer trust.

Ease of Doing Business

• India has made significant strides in improving its business environment, climbing from 142nd in 2014 to 63rd in the 2020 World Bank Doing Business Report (DBR).
• Government efforts to reduce red tape, simplify regulations, and create a more business-friendly environment have enhanced investor confidence.

Record Foreign Direct Investment (FDI)

• The Make in India initiative has greatly benefitted from record levels of FDI, driven by streamlined FDI policies and improved ease of business.
• FDI rose from $45.14 billion in 2014-15 to a record $84.83 billion in 2021-22.
• Between 2014 and 2024, India attracted $667.41 billion in FDI, with inflows reaching $70.95 billion in FY 2023-24.

Key Achievements

1. Growth in Manufacturing

• India is now the world’s second-largest mobile phone manufacturer.
• Mobile phone exports grew from ₹1,556 crore in 2014 to ₹1.2 lakh crore by 2024.
• The electronics industry expanded to $155 billion in FY 2023, with mobile phones contributing 43% of production.

2. Self-Reliance in Defence

• India has achieved notable progress in defence manufacturing, demonstrated by the launch of INS Vikrant, the first indigenous aircraft carrier.
• Defence production reached ₹1.27 lakh crore, with exports to more than 90 countries.
• Products like ‘Made in Bihar’ boots are now part of the Russian Army’s equipment.

3. Global Export Growth

• India’s merchandise exports hit $437.06 billion in FY 2023-24, reinforcing its role in global trade.

4. Job Creation

• Millions of jobs have been created across various sectors, with 8 lakh jobs generated through the PLI schemes alone.

Additional Achievements

• Kashmir willow cricket bats have gained global popularity.
• Amul has expanded its presence by exporting dairy products to the United States.
• The textile industry created 14.5 crore jobs across India.
• India manufactures 400 million toys annually, producing 10 new toys every second.

Criticism and Challenges

• Limited Impact on Manufacturing: Critics argue that Make in India has not significantly increased manufacturing’s share of GDP or attracted major investments.
  • The manufacturing sector’s contribution to GDP decreased to 15.9% in 2023-24, down from 16.7% in 2013-14.
  • Net FDI inflows have also declined from 1.5% of GDP in 2013-14 to 0.8% in 2023-24.
• Business Environment Concerns:
  • Despite improvements, India’s ease of doing business still faces challenges.
  • There is high taxation and rigid approaches to tax litigation.
  • A shortage of skilled labor in manufacturing persists, with competition from countries like Vietnam and Bangladesh.

Conclusion

• As the Make in India initiative enters its second decade, it stands as a symbol of India’s commitment to transforming its manufacturing landscape and global standing.
• With various reforms like the PLI schemes, PM GatiShakti, and the National Logistics Policy, India is positioning itself as a self-reliant and competitive economy.
• The success of homegrown projects, such as the Vande Bharat trains and INS Vikrant, and the growing electronics industry, indicate a bright future for India’s industrial and manufacturing sectors.