Business Economics & Services Team (BEST)
Are We Over Hyping up Make in India?
There is a worldly wisdom: When something is played up over and again, up your ante to know what is there inside. There are people who suspect high decibel advertisement campaigns, steep discounts, over pitched demagogues. I do not think that I am not the lone person who airs skepticism on these much touted projects, which are laced with a lot of promises, deliverable and marketed as game-changing strategies. Many have voiced concerns about the concept of Make in India in public forums.
The first to air a word of caution was the RBI governor, who maintained that Make in India should be more focused on the domestic market. Understandably, Indian products should become competitive within before it makes forays into the international market. How is this possible? Economists give a benchmark for measuring the optimal growth of the manufacturing sector in any economy. In India's case, the ideal share of manufacturing to country's GDP should be 40% or so. During the best of times, India had clocked only 25%. But slowly, the share had declined to 15% or so. The last UPA government had formulated a policy to up the share of the manufacturing to 25%. But it could not make much headway on account of the several scams that had erupted one after the other leading to a perceived policy paralysis.
If one tries to go beyond the veil of the new Make in India policy, the quintessence is the same, a new wine in the old bottle. it also aims to up the share of manufacturing to GDP to 25% in the conceivable future, create a modern technology focused manufacturing sector that is globally competitive, creating an enabling infrastructure sector and importantly an export surplus. It has set up various enabling institutions to achieve that objective including manufacturing competitive council and skill development council. Bereft of rhetoric, the new dispensation has engaged in these tasks. If the new government wants to be different from the previous one, it should deliver in time and with least resources. Then only it can take credit for whatever it proposes to do.
Can we create enough job in the manufacturing sector to absorb the multitudes of unemployed people? Empirical studies prove that intake people in the manufacturing sector will be less on account of the cap[ital intensity of the segment. Most of the state-of-the-art technologies need less number of people to operate them. Even with a manufacturing growth of 15% over a period of time, the number of people to be employed in the sector will be far less on account of the mechanization of many of its operations. therefore, no vistas have to be opened up for absorbing people in other sectors like construction, urban development etc.
Then there is the ecological issue. Industry is concerned about slow clearance of the projects from the environment angle. The government has committed to look into that seriously. But in lax in stringent environmental norms can escalate the social cost to the detriment of everyone.
Are We Over Hyping up Make in India?
There is a worldly wisdom: When something is played up over and again, up your ante to know what is there inside. There are people who suspect high decibel advertisement campaigns, steep discounts, over pitched demagogues. I do not think that I am not the lone person who airs skepticism on these much touted projects, which are laced with a lot of promises, deliverable and marketed as game-changing strategies. Many have voiced concerns about the concept of Make in India in public forums.
The first to air a word of caution was the RBI governor, who maintained that Make in India should be more focused on the domestic market. Understandably, Indian products should become competitive within before it makes forays into the international market. How is this possible? Economists give a benchmark for measuring the optimal growth of the manufacturing sector in any economy. In India's case, the ideal share of manufacturing to country's GDP should be 40% or so. During the best of times, India had clocked only 25%. But slowly, the share had declined to 15% or so. The last UPA government had formulated a policy to up the share of the manufacturing to 25%. But it could not make much headway on account of the several scams that had erupted one after the other leading to a perceived policy paralysis.
If one tries to go beyond the veil of the new Make in India policy, the quintessence is the same, a new wine in the old bottle. it also aims to up the share of manufacturing to GDP to 25% in the conceivable future, create a modern technology focused manufacturing sector that is globally competitive, creating an enabling infrastructure sector and importantly an export surplus. It has set up various enabling institutions to achieve that objective including manufacturing competitive council and skill development council. Bereft of rhetoric, the new dispensation has engaged in these tasks. If the new government wants to be different from the previous one, it should deliver in time and with least resources. Then only it can take credit for whatever it proposes to do.
Can we create enough job in the manufacturing sector to absorb the multitudes of unemployed people? Empirical studies prove that intake people in the manufacturing sector will be less on account of the cap[ital intensity of the segment. Most of the state-of-the-art technologies need less number of people to operate them. Even with a manufacturing growth of 15% over a period of time, the number of people to be employed in the sector will be far less on account of the mechanization of many of its operations. therefore, no vistas have to be opened up for absorbing people in other sectors like construction, urban development etc.
Then there is the ecological issue. Industry is concerned about slow clearance of the projects from the environment angle. The government has committed to look into that seriously. But in lax in stringent environmental norms can escalate the social cost to the detriment of everyone.
