Make in India is an initiative launched by the Government of India (GoI) on the 25th of September 2014. The thought process behind this idea is that India needs to step up its manufacturing game, for every successful self sustainable country has a strong industrial base. The concept is indeed a noble one. On the surface, it looks like it should generate a lot of employment, open up new entrepreneurial opportunities and overall enhance the skills of the workforce to create a sustainable long term workforce but on deeper digging, apparently it isn’t all flowers and sunshine.
The campaign focuses on attracting Foreign Direct Investment (FDI). The basic concept is that a foreign company will invest money and technology in India, give proper skill training to the people, employ them and have a manufacturing base here. Historically, foreign players have been very vary of investing in India. This is primarily because of the License Raj up untill 1991-92. Even after the opening up of the economy, the bureaucracy has been so slow that you need to wait months, sometimes even years on end to obtain work permits and get all the papers sorted for your business. With this campaign, however, it has been made easier to obtain licenses and any investment of money is hugely encouraged and easily facilitated by the government.
The real problem begins at the stage of implementation of the invested money in the right areas. We as a country have a huge deficit in the area of machinery and energy. Even large industrial areas face regular power cuts. Any specific heavy machinery has to be imported. This exponentially increases the lead costs and delays the break even point while giving the real profits in the hands of the foreign players.
Another point to be noted is that the money invested will definitely be pulled back after sufficient profits have been made. Once these companies pull out, we will once again have a pool of now educated and skilled workers discontented by the lack of job security and government apathy. In essence, this FDI money is just a soft loan.
These are some really worrying problems and the pain taken for the whole campaign doesn’t really seem worth it, yet, there can be a solution to this. While we do import technology and machinery, the Make in India campaign can encourage domestic players too to learn the technology and become self sufficient, and it could mandate the foreign companies for sufficient knowledge transfer, after all we are paying the price in terms of land, infrastructure and workers to these companies.
Proper diversification of all the sectors is also necessary. The campaign focuses chiefly on 25 sectors including aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery and electronic systems etc. but the only sector that has significantly attracted any interest is electronics. The fact that most jobs today are being created in the IT and electronics industry can be attested to this. The government needs to take enough steps to attract investment in other areas as well.
The seed of the campaign was sown only 3 years ago. It will take some time before the tree begins bearing fruit. As is the case with any new business, the start up costs are always high and turning a profit always takes some time. The same is the case with Make in India. Initial cold start problems are being seen and discussed, and unless these problems are sorted out, the campaign will indeed be a failure.
In conclusion, while I wholeheartedly support the idea of Make in India as I’m a firm believer that a country needs to have an extremely strong manufacturing base (just look at the US or UK) to be taken seriously in the international scene, I am also vary of the fact that unless properly protected with robust policies, our domestic economy will take a hit. Out of the 200 people in my mechanical engineering class, only 40-50 have started working, even then most of them are working in unrelated sectors. If there has been increase in employment because of this campaign, I simply do not see it. I can only hope it does bear fruit for us the youth in the future.
Unemployment is also a major reason why yours truly is blogging for you.
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