Dr.C.Muthuraja's Presentation on Make in India : A Boost to the Indian Manufacturing Sector
-
Upload
chinnasamy-muthuraja -
Category
Education
-
view
378 -
download
0
Transcript of Dr.C.Muthuraja's Presentation on Make in India : A Boost to the Indian Manufacturing Sector
Make in IndiaA Boost to the Indian Manufacturing Sector
Dr. C. MuthurajaDean, Curriculum Development & Research &
Head, Research Department of EconomicsThe American College, Madurai - 625 002
([email protected]) - (M-09486373765)
(Presented in UGC Sponsored State Level Workshop on ‘Make in India: A Boost to the Indian Manufacturing Sector’ on 22.03.2016 organized by Department of Economics, Devanga Arts
College (Autonomous), Aruppukottai-626101)
SINCE 1881
CONTENTS INTRODUCTION Make in India Campaign Thrust to Industry / Manufacturing/Service
Sector Focus of Make in India: on 25 sectors What is ‘Make in India’? Evaluation & Political Economy of Make in
India Concerns on Make in India Government Initiatives Road Ahead ! APPEAL
SINCE 1881
Introduction India is set to emerge as the world’s fastest-
growing major economy by 2015 ahead of China, as per the recent report by The World Bank
India’s Gross Domestic Product (GDP) is expected to grow at 7.5 per cent in 2015, as per the report
The improvement in India’s economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, RBI's inflation focus supported by benign global commodity prices
SINCE 1881
Make in India Campaign
Launched by Prime Minister Sh. Narendra Modi and the key objective of Make in India campaign is to invite businesses not only in India but across the world to invest & manufacture in India
The purpose of this campaign is a) Job Creation, b) Economic Development and c) Global Recognition
Make in India initiative aims to correct the composition of Indian GDP which is the root cause of recession
SINCE 1881
Make in India Campaign
Currently India’s GDP is heavily tilted in favor of service sector
Three sectors which contribute to GDP are (a) Agriculture (b) Industry / Manufacturing & (c) Services
Current contributions of these sectors in Indian Economy are a) Agriculture: 28% b) Industry / Manufacturing: 16% (Lowest) and c) Services: 56% (Highest)
It is clearly visible that our economy is over dependent on Services sector
SINCE 1881
Make in India Campaign New economic policies and its impact on Indian
Governments focused extensively mainly on Services sector
Service sector generated employment for skilled workforce whereas low skilled workers were completely marginalized
Every year approximately 12 million people are added to existing workforce and overwhelming majority is either unskilled or low skilled workers due to urbanization
There was no road map in place for these low skilled workers
SINCE 1881
Thrust to Industry / Manufacturing/Service Sector
SINCE 1881
Make in India initiative is an honest attempt to revive the fortunes of Industry / Manufacturing sector
Digital India will help to maintain contribution of Service sector but manufacturing / industry sector has to grow at much faster pace to out-pace service sector
Government should target to increase contribution of Industry / manufacturing from existing 16% to 35% in next 5 years
Make in India will help to achieve this goal but it comes with its own set of challenges
Manufacturing is capital and resources intensive sector which will require conducive environment for business
Thrust to …..
SINCE 1881
Labour issues will be major hurdle which the government is trying to handle through labour reforms
Besides this, a major push is required to upgrade infrastructure of country
Basically objective is to create ecosystem of small industries in periphery of manufacturing hub
Government will provide all the approvals under Make in India initiate in a time bound manner through single online portal
Make in India is designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country
Thrust to …..
SINCE 1881
The primary objective of this initiative is to attract investments from across the globe and strengthen India’s manufacturing sector
This programme is very important for the economic growth of India as it aims at utilizing the existing Indian skill/talent base, creating additional employment opportunities and empowering secondary and tertiary sector
The programme also aims at improving India’s rank on the Ease of Doing Business index by eliminating the unnecessary laws and regulations, making bureaucratic processes easier, making the government more transparent, responsive and accountable
Focus of Make in India: on 25 sectors
SINCE 1881
These include: automobiles, aviation, chemicals, IT & BPM, pharmaceuticals, construction, defence manufacturing, electrical machinery, food processing, textiles and garments, ports, leather, media and entertainment, wellness, mining, tourism and hospitality, railways, automobile components, renewable energy, biotechnology, space, thermal power, roads and highways and electronics systems
What is ‘Make in India’?
SINCE 1881
Deregulation and delicensing of the manufacturing sector
New Infrastructure Opening up India’s ‘high-value’
industrial sectors Specific targeting of twenty-five sectors ‘New Mindset-“an attitudinal shift in how
India relates to investors: not as a permit-issuing authority, but as a true business partner”
Evaluation & Political Economy of Make in India
SINCE 1881
Question the objectives and the strategy itself what sort of industry are we promoting? Domestic markets are extremely narrow – Ford and
Honda aren’t producing for the typical rural agricultural worker or urban casual labourer
These industries are capital-intensive and/or employ largely skilled labour (employment growth is therefore likely to be minimal, especially since domestic industry will undergo considerable upheaval and displacement)
Manufacturers producing abroad are likely to have developed processes that reflect the capital-labour ratios that are prevalent in advanced capitalist countries
Concerns on Make in India You can get cheap products as they are
manufacturing in the same company Change our country from being dependent on
imports to a country of exports Provide large scale employment to both skilled and
non-skilled workers Call to biggest manufacturers of the world whose
product we import regularly, to open their production units in India
Biggest sector after agriculture in India which is not utilized to its full capacity
Boost exportsSINCE 1881
Concerns on Make in India
SINCE 1881
Increase in employment : We have 475 mn (2nd largest in the world) persons as a cheap labour from which 90% is unorganised
Improvement in infrastructure Improvement in education and lifestyle of
common man Company makes goods in developed country, the
cost gets higher due to higher salaries and maintenance cost
Making of goods by foreign companies increases job possibility
Government Initiatives
SINCE 1881
This initiative is expected to increase the purchasing power of an average Indian consumer, which would further boost demand, and hence spur development, in addition to benefiting investors
Government has come up with Digital India initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and to increase the digital literacy
Currently, the manufacturing sector in India contributes over 15 per cent of the GDP. GOI, under the Make in India initiative, is trying to give boost to the contribution made by the manufacturing sector and aims to take it up to 25 per cent of the GDP
Road Ahead !
SINCE 1881
IMF forecasted that India will witness a GDP growth rate of 7.5 per cent in 2016, due to improved investor confidence, lower food prices and better policy reforms
According to mid-year update of United Nations World Economic Situation and Prospects, India is expected to grow at 7.6 per cent in 2015 and at 7.7 per cent in 2016
Global Economic Prospects (GEP) report by World Bank, India is leading The World Bank’s growth chart for major economies
India to become the fastest growing major economy by 2015, growing at 7.5 per cent
QUESTIONS PLEASE
SINCE 1881
QUESTIONABLE QUESTIONS
WWW.THANKS.COM
THANKING YOU
SINCE 1881