Due to the economy’s slower growth than projected in the first three months of 2019, India lost its position as the world's fastest-growing economy to China. According to official data, India's GDP grew at a pace of 5.8 per cent, which is lower than China's 6.4 per cent growth rate. So, India required some new industrial and economic reforms.
India became the world's fastest-growing economy during the first term of the Narendra Modi government. However, the economy grew at a slower pace during the government's second term. To counter this growth decline, the Make in India Scheme was initiated by the government, and it was one of the factors that contributed to the country's economic growth. The goal of launching this initiative is to strengthen manufacturing infrastructure, improve skill development, attract international investment, and increase employment opportunities. Other advantages of Make In India include enhancement of existing technology, GDP expansion, ease of doing business, self-sufficiency and continuous flow of capital, etc.
Make In India Scheme
Make in India is a government of India initiative established in 2014 by Prime Minister Narendra Modi with the goal of boosting the domestic manufacturing sector and attracting foreign investment. Make in India is a major government initiative that encompasses a slew of different sub-schemes and programs aimed at boosting the country's economic growth. The government hopes that by launching this initiative, it will be able to revitalise the country's ailing manufacturing sector and boost economic growth. By boosting the country's 'Ease of Doing Business' ranking, the GOI also hopes to encourage foreign enterprises to invest and manufacture in the country. The long-term goal is to transform India into a global manufacturing hub while simultaneously increasing job possibilities in the country.
The Make In India initiative focuses on 25 sectors, which are divided into manufacturing and service sectors. The manufacturing sector includes aerospace and defence, shipping, construction, railways, etc. The service sector includes legal services, tourism, transport services, accounting services, financial services, environmental services, educational services, etc.
Let us now understand the importance and advantages of the Make In India scheme.
Why Is The Government Of India Focusing On Make In India Scheme?
The government of India has chosen to focus on Make In India and the manufacturing sector for a variety of reasons. The following are the most important:
- Although the services sector's portion of the Indian economy increased to 57 per cent in 2013, it only accounted for 28 per cent of jobs. As a result, the manufacturing sector needs to be expanded to increase jobs. This is because, given the demographic dividend of India, the services sector now has a low absorption potential.
- The bad state of manufacturing in India is another reason for launching the Make In India initiative. Manufacturing accounts for only approximately 15% of the Indian economy overall, which is significantly lower than our East-Asian neighbours. The government hopes to encourage domestic and foreign enterprises to participate in manufacturing in India, which will benefit the sector and create jobs for unskilled and skilled workers.
- The manufacturing sector has more backward links than any other sector, therefore increased demand in manufacturing drives growth in other sectors too. This results in more jobs, innovation, and investments, as well as a greater standard of life in the economy as a whole.
Advantages Of Make In India
There are many advantages of Make In India; following are a few advantages of Make In India program.
- One of the biggest advantages of Make In India is that it provides job opportunities to the young generation. It has earmarked the country's youth as its primary beneficiaries. Investments in specific industries, such as medicines, tourism, and others, will encourage the young generation to come out with new innovative ideas.
- Economic growth will be inevitable as a result of product manufacturing in India, which will boost the trade sector and increase the GDP of the Indian economy.
- The rise of manufacturing industries would transform India into a manufacturing hub for a variety of products, resulting in a large influx of foreign direct investment, which would strengthen the rupee in the international market.
- India, as a developing country, lacks various modern technologies, which is a significant impediment to the country's development. As a result of international enterprises joining the Make in India crusade, India will be able to benefit from the best technology that these countries and enterprises have to offer.
- With the Make in India initiative, not only will the young generation be given jobs, but their young and fresh ideas will also propel the industrial and commercial sector to new heights. For India, this is a win-win situation and the best use of youth.
- The many constraints imposed on entrepreneurs will be abolished as a result of the Make In India initiative to manufacture their products in India, thus allowing companies from all over the world to invest in India. Thus, improving India's position on the 'Ease Of Doing Business' scale.
These are a few advantages of Make In India. Let us talk about various milestones of the Make In India initiative.
Prominent Milestones Of The Make In India Initiative
Following are a few prominent milestones of the Make In India initiative:
- Businesses have found the Goods and Services Tax (GST) to be a more straightforward tax regime, which has eased India’s overall tax procedural system.
- In the country, digitisation is gaining momentum. Taxation procedure, company formation, and many other procedures have been made available online, streamlining the process and increasing efficiency. India's ranking in the 'Ease Of Doing Business' index has improved as a result of this.
- As of May 2019, 356 million new bank accounts had been established as a result of financial inclusion schemes such as the PMJDY.
- India's EoDB index has improved as a result of FDI policy and liberalisation. Increased FDI inflows have resulted in the creation of employment, investments, and revenue.
- The new insolvency code, the Insolvency and Bankruptcy Code 2016, combined all insolvency laws and rules into a single piece of legislation. This has brought India's bankruptcy code up to par with international standards.
The Make in India initiative aims to improve skill development, enhance industrial infrastructure, and establish India as a worldwide manufacturing centre. The government's initiative aims to attract investments from around the world while also providing job opportunities for the country's youth. There are several other advantages of the Make in India program, and the Indian government has turned many of these advantages into prominent milestones.
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Q. What are some challenges of the Make In India initiative?
Ans. Creating a healthy business environment, lack of research and boosting the competitiveness of goods manufactured in India are a few challenges of the Make In India program.
Q. What is the result of the Make In India program in the mobile phone industry?
Ans. The mobile phone manufacturing sector declared a great success, with 120 units being built up under Make In India initiative. India has avoided around ₹3 lakh crore in potential outflows.
Q. What are various sub-schemes under Make In India initiative?
Ans. Several initiatives like Skill India, Digital India, Startup India and AMRUT have been established by the government of India to assist the Make in India initiative.
Q. What are industrial corridors under Make In India scheme?
Ans. The government is planning to build five industrial corridors. These corridors are built with a strategic focus on economic development that will help India's industrialisation and urbanisation progress. Following are the five industrial corridors under Make In India program:
- DMIC or Delhi-Mumbai Industrial Corridor
- AKIC or Amritsar-Kolkata Industrial Corridor
- BMEC or Bengaluru-Mumbai Economic Corridor
- CBIC or Chennai-Bengaluru Industrial Corridor
- VCIC or Vizag-Chennai Industrial Corridor
Q. What are several targets set by the government of India for the Make In India initiative?
Ans. The Make in India program has a number of set objectives. They are as follows:
- Increase the manufacturing sector's annual growth rate to 12-14 per cent.
- By 2022, the manufacturing sector will have added 100 million jobs.
- By 2022, the manufacturing sector's share of GDP will have risen to 25%.
- Increasing India's industrial sector's global competitiveness.
- Improving India's position in the EoBD Index.