Achievements of Make in India | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Make in India: Achievements

Why in News?

• The Make in India initiative, launched on September 25, 2014, recently celebrated its 10-year milestone.
• Originally introduced as a strategic response to revitalize the Indian economy, which was facing slow growth at the time, Make in India has since evolved into a crucial part of the government’s efforts to boost manufacturing and economic development.

What is the Make in India Initiative?

• Aim & Objective: Its primary goal was to transform India into a global manufacturing hub by attracting investment, encouraging innovation, and developing world-class infrastructure.

• It aimed to bolster India's industrial capacity while promoting the 'Vocal for Local' concept to reduce dependence on foreign products.

• In addition, the initiative sought to create employment opportunities for India's youthful workforce, fostering economic growth and self-reliance.

Make in India 2.0:

• The ongoing "Make in India 2.0" phase, encompassing 27 sectors, continues to propel the program forward, consolidating India’s role as a significant player in the global manufacturing arena.

Targeted Sectors Under the Initiative:

Manufacturing Sectors

• Aerospace and Defense
• Automotive and Auto Components
• Pharmaceuticals and Medical Devices
• Biotechnology
• Capital Goods
• Textile and Apparels
• Chemicals and Petrochemicals
• Electronics System Design and Manufacturing
• Leather and Footwear
• Food Processing
• Gems and Jewelry
• Shipping, Railways, Construction, and New and Renewable Energy

Service Sectors

• Information Technology (IT) and IT-enabled Services (ITeS)
• Tourism and Hospitality
• Medical Value Travel (travel to maintain, improve or restore health through medical intervention)
• Transport and Logistics
• Accounting, Legal, Financial, and Audio-Visual Services
• Communication and Environmental Services
• Construction-related Engineering Services
• Education Services

Four Pillars of the Initiative:

• New Processes: This pillar aims to enhance the ease of doing business in India by simplifying regulations and reducing bureaucratic hurdles.
• New Infrastructure: The initiative emphasises the development of industrial corridors, smart cities, and state-of-the-art technology infrastructure.
• New Sectors: Foreign Direct Investment (FDI) regulations were liberalised to open up several sectors, including defense, insurance, medical devices, and railways.
• New Mindset: The government has shifted its role from being a regulator to a facilitator, collaborating with industries to promote economic development.

What are the Major Programs and Schemes under Make in India?

• Production-Linked Incentive (PLI) Schemes: With an allocation of Rs. 1.97 lakh crore (approximately USD 26 billion), the PLI schemes aim to boost manufacturing across 14 key sectors, including mobile phones, medical devices, and automobiles. By July 2024, 755 applications had been approved, resulting in investments worth Rs. 1.23 lakh crore and generating employment for 8 lakh people.
• PM GatiShakti: Launched in October 2021, PM GatiShakti focuses on holistic infrastructure development, integrating multimodal connectivity across sectors such as railways, roads, ports, airports, and mass transport. It aims to support India's goal of becoming a USD 5 trillion economy by 2025.
• Semicon India Program: Approved in 2021 with a budget of Rs. 76,000 crore, the Semicon India program aims to establish a sustainable semiconductor and display manufacturing ecosystem. Significant projects include Micron's Rs. 22,000 crore investment in semiconductor manufacturing.
• National Logistics Policy (NLP): Launched in September 2022, the NLP aims to improve India's logistics network, reduce costs, and enhance the country’s Logistics Performance Index ranking. The policy complements PM GatiShakti's infrastructure initiatives.
• Industrialisation & Urbanisation: The National Industrial Corridor Development Programme plays a crucial role in advancing industrialisation and urbanisation in India. This program integrates industrial corridors with urban planning, promoting the development of smart cities and industrial hubs. Recent approvals include 12 projects worth Rs. 28,602 crore, aiming to position India as a global manufacturing destination.
• Startup India Initiative: Launched in 2016, the Startup India initiative has created a robust ecosystem that supports entrepreneurship, leading to the establishment of over 148,931 startups and generating 15.5 lakh direct jobs.
• Tax Reforms: The introduction of the Goods and Services Tax (GST) in 2017 unified India's tax structure, simplified compliance, and enhanced manufacturing competitiveness.
• Unified Payments Interface (UPI): India's UPI has emerged as a global leader in digital payments, handling 46% of the world's real-time payment transactions. From April to July 2024, UPI recorded transactions worth Rs. 81 lakh crore, significantly supporting the growth of the digital economy.
• Ease of Doing Business: India made a notable leap in the Ease of Doing Business ranking, moving from 142nd in 2014 to 63rd in 2019, reflecting efforts to simplify regulations and reduce bureaucratic barriers, boosting investor confidence.
• Record FDI to Boost Make in India: The Make in India initiative has seen significant success, driven by record FDI inflows and improvements in ease of doing business. FDI grew from USD 45.14 billion in 2014-15 to USD 84.83 billion in 2021-22, with a total of USD 667.41 billion attracted between April 2014 and March 2024. In FY 2023-24, FDI reached USD 70.95 billion, highlighting India's appeal as a global investment destination.

Key Achievements under the Make in India Initiative

• Healthcare: India became a major exporter of Covid-19 vaccines, supplying 60% of the global vaccine requirements.
• Railways: The indigenous Vande Bharat trains have demonstrated India's local manufacturing capabilities.
• Defense Production: The launch of INS Vikrant, India's first domestically built aircraft carrier, marked a significant milestone in defense self-reliance.
• Electronics Manufacturing: India has become the second-largest mobile phone manufacturer, with the electronics market reaching USD 155 billion in FY 2023.
• Merchandise Exports: India's merchandise exports stood at USD 437.06 billion in FY 2023-24, showcasing its increasing role in global trade.
• Textiles and Employment: The sector has created approximately 14.5 crore jobs, contributing substantially to employment generation.
• Toy and Sports Goods Manufacturing: India produces 400 million toys annually and exports popular items like Kashmir willow cricket bats.

Challenges Related to Make in India Initiative

• Infrastructure Gaps: Despite improvements, India's infrastructure, including roads, railways, and ports, still lags behind developed countries, affecting the smooth movement of goods. According to the Economic Survey 2022-23, the logistics cost in India is around 14%-18% of GDP, compared to 8-10% in developed economies like Germany or the US.
• Regulatory and Bureaucratic Hurdles: While India has made strides in ease of doing business, regulatory and bureaucratic obstacles persist. Complex approval processes and red tapism can delay project execution. Land acquisition remains a cumbersome process due to outdated laws and lengthy legal procedures.
• Skill Gaps in the Workforce: There is a mismatch between the skills available in the workforce and the skills required in manufacturing industries. High-tech industries like electronics and biotechnology require specialised skills, but India has a shortage of skilled technicians and engineers. For instance, despite being a major IT hub, India has struggled to expand its manufacturing capacity in advanced electronics due to a lack of skilled labor.
• Dependence on Imports for Key Inputs: India continues to rely heavily on imports for critical components and raw materials, which limits the growth of domestic manufacturing. The electronics industry, including mobile phone manufacturing, depends on importing semiconductor chips and other key components from countries like China and Taiwan. This dependence undermines the goal of self-reliance.

Way Forward

• Enhancing Infrastructure Development: Increase public and private investment in transportation, logistics, and utility infrastructure to reduce costs and improve efficiency. This includes upgrading roads, railways, ports, and power supply. Encourage Public-Private Partnerships(PPPs) to accelerate infrastructure projects, leveraging private sector expertise and funding.
• Streamlining Regulatory Processes: Simplify business regulations and approvals to reduce bureaucratic delays. Implement a single-window clearance system for faster approvals. Promote e-governance and digital platforms to enhance transparency and efficiency in regulatory processes.
• Skill Development Initiatives: Launch skill development programs tailored to the specific needs of industries. Collaborate with industry players to identify skills gaps and create relevant training modules. Strengthen vocational education and training programs to prepare the workforce for manufacturing jobs, focusing on emerging technologies.
• Promoting Local Sourcing and Supply Chain Development: Implement policies that incentivize the use of local suppliers and manufacturers, reducing dependence on imports for critical components. Build integrated supply chain ecosystems that support domestic manufacturing, including logistics, component production, and distribution networks.