Make In India - Initiatives, Aims, Advantages & Challenges [UPSC Notes GS-III]

Make in India is a Government of India scheme launched by Prime Minister Narendra Modi in 2014 intended to boost the domestic manufacturing sector and also augment investment into the country. This article comprehensively covers details on objectives, schemes & initiatives under it, 25 focus sectors, advantages, challenges, & progress related to the Make in India Scheme.

Aspirants would find this article very helpful while preparing for the IAS Exam.

The government wants to revive the lagging manufacturing sector and spur the growth of the economy. The GOI also intends to encourage businesses from abroad into investing in the country and also manufacture here, by improving the country’s ‘Ease of Doing Business’ index. The long-term vision is to gradually develop India into a global manufacturing hub, and also boost employment opportunities in the country.

The highlights of this scheme are mentioned in the table below:

Make in India is a very important government programme that has under its wing, many other sub-schemes, and programmes. Government schemes are important for the IAS Exam. Candidates can also download the notes PDF at the end of this article.

Make in India Logo

The Make in India logo is a lion. It is a lion’s silhouette filled with cogs. This symbolizes manufacturing, national pride, and strength.

Make In India – Focus on 25 Sectors

The Make in India website also has listed the 25 focus sectors and also furnished all relevant details about these sectors, and related government schemes, including the FDI policies, IPR, etc. The main sectors (27 sectors) covered under this campaign are given below:

Manufacturing Sectors:

1. Aerospace and Defence
2. Automotive and Auto Components
3. Pharmaceuticals and Medical Devices
4. Bio-Technology
5. Capital Goods
6. Textile and Apparels
7. Chemicals and Petro chemicals
8. Electronics System Design and Manufacturing (ESDM)
9. Leather & Footwear
10. Food Processing
11. Gems and Jewellery
12. Shipping
13. Railways
14. Construction
15. New and Renewable Energy

Services Sectors:

16. Information Technology & Information Technology enabled Services (IT &ITeS)
17. Tourism and Hospitality Services
18. Medical Value Travel
19. Transport and Logistics Services
20. Accounting and Finance Services
21. Audio Visual Services
22. Legal Services
23. Communication Services
24. Construction and Related Engineering Services
25. Environmental Services
26. Financial Services
27. Education Services

Why Make in India?

There are multiple reasons why the government has chosen to focus on manufacturing. The key ones are discussed below:

1. For the past two decades, India’s growth story seems to have been led by the services sector. This approach paid off in the short-run, and India’s IT and BPO sector saw a huge leap, and India was often dubbed the ‘back office of the world’. However, even though the share of the services sector in the Indian economy rose to 57% in 2013, it contributed to only 28% in the share of employment. So, the manufacturing sector needed to be augmented to boost employment. This is because the services sector currently has low absorption potential considering the demographic dividend in the country.
2. Another reason to launch the campaign is the poor condition of manufacturing in India. The share of manufacturing in the overall Indian economy is only about 15%. This is way lower than our neighbours in East Asia. There is an overall trade deficit when it comes to goods. The trade surplus in services hardly covers one-fifth of India’s trade deficit in goods. The services sector alone cannot hope to answer this trade deficit. Manufacturing will have to chip in. The government is hoping to encourage businesses, both Indian and foreign to invest in manufacturing in India, which will help this sector and also generate employment in both skilled and unskilled levels.
3. To focus on manufacturing is that no other sector seems to have such a huge multiplier effect on economic growth in a country, according to various studies. The manufacturing sector has larger backward linkages and hence, growth in demand in manufacturing spurs growth in other sectors as well. This generates more jobs, investments, and innovation, and generally leads to a higher standard of living in an economy.

Make in India – Initiatives

1. For the first time, the sectors of railways, insurance, defense, and medical devices have been opened up for more Foreign Direct Investment (FDI).
2. The maximum limit in FDI in the defense sector under the automatic route has been raised from 49% to 74%. This increase in FDI was announced by Finance Minister Nirmala Sitaraman on May 16, 2020.
3. In construction and specified rail infrastructure projects, 100% FDI under the automatic route has been permitted.
4. There is an Investor Facilitation Cell that assists investors from the time of their arrival in India to their departure from the country. This was created in 2014 to give services to investors in all phases such as the pre-investment phase, execution, and also after delivery services.
5. The government has taken steps to improve India’s ‘Ease of Doing Business’ rank. India climbed 23 points in the Ease of Doing Business index to 77th place in 2019, becoming the highest-ranked in South Asia in this index.
6. The Shram Suvidha Portal, eBiz portal, etc. have been launched. The eBiz portal offers single-window access to eleven government services connected with starting a business in India.
7. Other permits and licenses required to start a business have also been relaxed. Reforms are being undertaken in areas like property registration, payment of taxes, getting power connection, enforcing contracts, and resolving insolvency.
8. Other reforms include licensing process, time-bound clearances for applications of foreign investors, automation of processes for registration with the Employees State Insurance Corporation and the Employees Provident Fund Organization, adoption of best practices by states in granting clearances, decreasing the number of documents for exports, and ensuring compliance through peer evaluation, self-certification, etc.
9. The government hopes to improve physical infrastructure chiefly through the PPP mode of investment. Ports and airports have seen increased investment. Dedicated freight corridors are also being developed.

The government has launched plans to create 5 industrial corridors. They are underway. These corridors are spread across the length and breadth of India, with a strategic focus on inclusive development which will augment industrialization and urbanization in a planned manner. The corridors are:

1. Delhi-Mumbai Industrial Corridor (DMIC)
2. Amritsar-Kolkata Industrial Corridor (AKIC)
3. Bengaluru-Mumbai Economic Corridor (BMEC)
4. Chennai-Bengaluru Industrial Corridor (CBIC)
5. Vizag-Chennai Industrial Corridor (VCIC)

Make in India – Schemes

Several schemes were launched to support the Make in India programme. These schemes are discussed below:

Skill India

This mission aims to skill 10 million in India annually in various sectors. For ‘Make in India’ to turn into a reality, there is a need to upskill the large human resources available. This is important because the percentage of formally skilled workforce in India is only 2% of the population.

Startup India

The main idea behind this programme is to build an ecosystem that fosters the growth of startups, driving sustainable economic growth, and creating large-scale employment.

Digital India

This aims to transform India into a knowledge-based and digitally empowered economy. To know more about Digital India, click on the linked page.

Pradhan Mantri Jan Dhan Yojana (PMJDY)

The mission envisages financial inclusion to ensure access to financial services, namely banking savings & deposit accounts, remittances, credit, insurance, and pension in an affordable manner. Click the linked article to know more about Pradhan Mantri Jan Dhan Yojana (PMJDY).

Smart Cities

This mission aims to transform and rejuvenate Indian cities. The goal is to create 100 smart cities in India through several sub-initiatives.

AMRUT

AMRUT is the Atal Mission for Rejuvenation and Urban Transformation. It aims to build basic public amenities and make 500 cities in India more livable and inclusive.

Swachh Bharat Abhiyan

This is a mission aimed at making India more cleaner and promoting basic sanitation and hygiene. For more information on Swachh Bharat Mission, click on the linked article.

Sagarmala

This scheme aims at developing ports and promoting port-led development in the country. Read more on the Sagarmala Project in the linked article.

International Solar Alliance (ISA)

The ISA is an alliance of 121 countries, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn. This is India’s initiative aimed at promoting research and development in solar technologies and formulating policies in that regard.

AGNII

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

Make in India – Objectives

There are several targets aimed by the Make in India mission. They are:

1. Raise in manufacturing sector growth to 12-14% per year.
2. Create 100 million additional jobs in the manufacturing sector by 2022.
3. Increase in the manufacturing sector’s share in the GDP to 25% by 2022.
4. Creating required skill sets among the urban poor and the rural migrants to foster inclusive growth.
5. A rise in the domestic value addition and technological depth in the manufacturing sector.
6. Having an environmentally sustainable growth.
7. Augmenting the global competitiveness of the Indian manufacturing sector.

Make in India – Progress

There have been several milestones attributed to the Make in India scheme. Some of the prominent ones are listed below:

1. The introduction of the Goods and Services Tax (GST) has eased the tax procedural system for businesses. The GST has been a fillip to the Make in India campaign.
2. Digitization in the country has gained momentum. Taxation, company incorporation, and many other processes have been made online easing the overall process and improving efficiency. This has upped India’s rank in the EoDB index.
3. The new insolvency code namely, the Insolvency and Bankruptcy Code 2016 integrated all laws and rules relating to insolvency into a single legislation. This has taken the bankruptcy code of India on par with global standards.
4. Due to schemes of financial inclusion such as the PMJDY, as of May 2019, 356 million new bank accounts were opened.
5. FDI liberalization has helped India’s EoDB index to be favourable. Larger FDI inflows will create jobs, income, and investments.
6. Infrastructure and connectivity have received major push-through schemes like Bharatmala and Sagarmala, as well as various railway infrastructure development schemes.
7. BharatNet – this is a telecom infrastructure provider set up by the GOI to enhance digital networks in the rural areas of the country. This is perhaps the world’s largest rural broadband project.
8. India is ranked fourth in the world in terms of its capacity to harness power from winds and ranked number 6 in the world in harnessing solar power. Overall, India is ranked fifth in the world in installed renewable energy capacity.

Make in India – Advantages

The Make in India campaign has had several positive developments for the country. Below are some more benefits that have been derived from this mission.

1. Generating employment opportunities.
2. Increasing the GDP by expanding economic growth.
3. When FDI inflows become more, the rupee will be strengthened.
4. Small manufacturers will get a thrust, particularly when investors from abroad invest in them.
5. When countries invest in India, they will also bring with them the latest technologies in various fields.
6. Due to the various initiatives taken under the Mission, India has moved up the ranks in the EoDB index.
7. Setting up manufacturing centres and factories in rural areas will foster the development of these areas as well.

Make in India – Challenges

Even though the campaign has seen success in some quarters, there have been criticisms as well. There are also many challenges facing the country if she is to achieve the lofty targets set by the establishment. Some of the criticisms are laid out below.

1. India has about 60% of cultivable land. The thrust on manufacturing is said to affect agriculture negatively. It can even cause a permanent disruption of arable land.
2. It is also believed that rapid industrialization (even with the thrust on “going green”) can lead to a depletion of natural resources.
3. A fallout of inviting large-scale FDI is that local farmers and small entrepreneurs may not be able to face the competition from international players.
4. The campaign, with all its focus on manufacturing, can cause pollution and environmental side effects.
5. There are serious lacunae in the physical infrastructure facilities in the country. For the campaign to be successful, it is necessary to build up the infrastructure available in the country and also reduce problems like corruption at the lowest levels. Here, India can take lessons from China, which has dramatically improved its share of global manufacturing from 2.6% in the 1990s to 24.9% in 2013. China rapidly developed its physical infrastructure like railways, roadways, power, airports, etc.

Candidates should follow the latest developments in Current Affairs related to other government schemes for their UPSC 2024 preparation.

Make in India Notes – UPSC:- Download PDF Here

Candidates can check out the detailed information on Make in India on the video given below-

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