29-December-2023-Special-Article

THERE IS NO SUBSTITUTE FOR AN INDUSTRIAL POLICY

The Make in India (MII) initiative, launched in 2014, marked a departure from India’s earlier self-sufficiency policies. Unlike previous approaches, MII aimed to boost domestic manufacturing, attract investments, and position India as a global manufacturing hub. Despite concerns about its implementation, MII has witnessed both successes and failures, shaping India’s manufacturing landscape.
Make in India Policy:
• Launched in 2014 to boost domestic manufacturing.
• Aims to increase the growth rate, create jobs, and raise the manufacturing sector’s GDP contribution.
Objectives:
• Increase manufacturing sector growth to 12-14% per annum.
• Create 100 million additional manufacturing jobs by 2025.
• Increase manufacturing sector’s GDP contribution to 25% by 2025.
Strategies:
• Streamlining business processes.
• Developing infrastructure.
• Skilling the workforce.
• Incentivizing investments.
• Focusing on key sectors like automobiles, aerospace, and electronics.
Rationale behind Make in India:
• Launched as a sequel to earlier initiatives.
• Aimed to address constraints like inadequate infrastructure, regulatory complexities, and skilled manpower shortage.
• Goals included raising the manufacturing sector’s GDP contribution and creating millions of additional jobs.
Successes and Failures:
Successes:
• Improved ranking in the Ease of Doing Business Index.
• Opened various sectors to private and foreign investment.
• Growth in sectors like automobiles, electronics, and renewable energy.
• Leadership in mobile phone manufacturing.
Failures:
• Failed to create an international niche market.
• Missed targets for manufacturing sector’s share in GDP, job creation, and growth.
• Faced challenges such as policy paralysis and infrastructure bottlenecks.
Why Make in India Fell Short:
• Introduction of the production-linked incentive (PLI) scheme.
• PLI aimed to attract investments and technology but fell short in creating sufficient jobs.
• Labour-intensive manufacturing needed for substantial job creation.
Role of MSMEs in Job Creation:
• Over 99% of India’s MSMEs in the unorganised sector.
• Limited potential for productive job creation.
• National Industrial Policy required for sectors like toys, garments, and footwear.
Need for National Industrial Policy:
Job Creation:
• Incentives for industries to expand production and exports.
• Infrastructure development for efficient industrial movement.
• Workforce skills enhancement through education and training.
• Entrepreneurship and innovation promotion for startups and SMEs.
Alignment with Social and Environmental Goals:
• Inclusive and sustainable industrial development.
• Addressing poverty, gender equality, and climate change.
Current Status:
• New industrial policy (NIP ’23) on hold.
Conclusion:
While Make in India aimed to transform India into a manufacturing powerhouse, it faced challenges in achieving its ambitious goals.
A shift towards a comprehensive National Industrial Policy, aligned with social and environmental objectives, is imperative to create productive employment opportunities and overcome the shortcomings of Make in India.
The delayed introduction of the new industrial policy underscores the need for a strategic and holistic approach to address India’s industrial and employment challenges.
Mains Question:
Q. Assess the successes and failures of the Make in India initiative, and discuss the significance of a National Industrial Policy in addressing India’s industrial and employment challenges. (150 WORDS)