The Make in India Initiative: Has it Worked?
Authors : Lalita Som
Pages : 55-88
View : 8 | Download : 5
Publication Date : 2018-04-10
Article Type : Other
Abstract :Manufacturing sector has the potential to lift half a billion more of India’s population out of poverty through income, export and employment growth. For a broad economic growth, India must focus both on domestic production to satisfy its large domestic demand and producing goods for global markets. However, value added manufacturing, as a percentage of GDP, has remained constant since 2000. Make in India was launched in 2014 to bring manufacturing back into the spotlight. The article looks at the relevant progress made since the launch of Make in India. Since then, the country has improved its rank consistently and has seen a significant jump of 30 places in 2017 in the World Bank’s annual ease of doing business survey and has eased statutory restrictions on foreign direct investment across sectors. Consequently, FDI inflows saw a rise, but the investment to GDP and the ratio of value added manufacturing to GDP have been declining. The downward trend in many of the economic variables like the current account has been unambiguous since the beginning of 2017. There is a broad consensus amongst commentators about the downward trend in the economic variables related to manufacturing and the structural impediments facing manufacturing in India. To achieve the objectives of Make in India, India must position itself to benefit from the structural changes in technology and other emerging forces of globalization. For this, India needs to address a number of structural bottlenecks, which have intensified India’s loss of competitiveness in the manufacturing sector. The article discusses the ten most important of these structural impediments and evaluates the progress India has made since the launch of Make in India and bolsters its arguments with international indices capturing trends in those structural variables. However, it is too early to call Make in India a success or a failure. Although India has introduced some significant policy changes, the success of these policies is dependent on their effective implementation.Keywords : Make in India, manufacturing value added, factor markets, infrastructure, regulatory bottlenecks