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Mains Practice Questions

  • Q. Make in India Scheme was launched with the intent of making India self-reliant in manufacturing, but it has achieved no significant feet. Critically analyse. (150 Words)

    12 Oct, 2022 GS Paper 3 Economy

    Approach

    • Start your answer by giving a brief about the Make in India Scheme and its objectives. 
    • Discuss the issues related to the Make in India Programme. 
    • Discuss achievements of the Make in India. 
    • Conclude your answer suitably. 

    Introduction

    Make in India was launched in 2014 and aims to transform the country into a leading global manufacturing and investment destination. 

    The initiative is an open invitation to potential investors and partners across the globe to participate in the growth story of ‘New India’. 

    Make In India has substantial accomplishments across 27 sectors. These include strategic sectors of manufacturing and services as well. 

    Objectives of Make in Programme

    • To attract foreign investment for new industrialisation and develop the already existing industry base in India to surpass that of China. 
    • The target of an increase in manufacturing sector growth to 12-14% per annum over the medium term. 
    • To increase the share of manufacturing sector in the country’s Gross Domestic Product from 16% to 25% by 2022. 
    • To create 100 million additional jobs by 2022. 
    • To promote export-led growth. 

    Body

    Issues Related to the Make in India Programme

    • Investment from Shell Companies: Large part of the Indian FDI is neither foreign nor direct but comes from Mauritius-based shell companies which are suspected to be investing black money from India only, which is routed via Mauritius. 
    • Low Productivity: The productivity of Indian factories is low and workers have insufficient skills. McKinsey report states that Indian workers in the manufacturing sector are, on average, almost four and five times less productive than their counterparts in Thailand and China. 
    • Small Industrial Units: The size of the industrial units is small for attaining the desired economies of scale, investing in modern equipment and developing supply chains. 
    • Infrastructure: Electricity costs are almost the same in India and China, but power outages are much higher in India. 
    • Transportation: Average speeds in China are about 100 km per hour, while in India, they are about 60 km per hour. Indian railways have saturated, and Indian ports have been outperformed by a lot of Asian countries. 
      • The 2018 World Bank’s Logistics Performance Index (LPI) ranked India 44th among 160 countries. Singapore was ranked seventh, China 26th and Malaysia 41st. The average ship turnaround time in Singapore was less than a day and in India, it was 2.04 days. 
    • Red Tapism: Bureaucratic procedures and corruption make India less attractive for investors. 

    Achievements of Make in India Programme

    • Various products manufactured in India like Hindustan Aeronautics Limited (HAL) Tejas Light combat aircraft by sourcing 95% of the resources locally. 
    • Defence equipment amounting to INR 2059.18 Crore has been exported to 28 countries in FY 2015-16. 
    • Around 38 mobile manufacturing units have been set up which has also generated employment. 

    Way Forward

    • The Make in India initiative has been striving to ensure that the business ecosystem in the nation is conducive for investors doing business in India and contributing to the growth and development of the Nation. 
    • This has been done through a range of reforms that have led to increased investment inflows as well as economic growth. 
    • With this initiative at the forefront, the businesses in India are aiming that the products that are 'Made in India' are also ‘Made for the World,’ adhering to global standards of quality. 

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