Make in India: The Lion is Moving Backwards, Despite Government Claims

Three years ago, when Make in India was launched on September 25, Prime Minister Narendra Modi called the initiative a “lion’s step” towards promoting the manufacturing sector and generating millions of jobs.

And while the central government maintains that its high-profile programme is on the right path, official data suggests otherwise.

The Bharatiya Janata Party (BJP) government seems to be lagging far behind in reaching its target of increasing the share of manufacturing to 25% of the GDP by 2020 from 15% of the GDP in 2014.

As a recent report of the Parliamentary Standing Committee on Commerce admitted, “the manufacturing sector has grown only by an average of 1.6 percent in the last 5 years till 2015-16.”

Foreign Direct Investment (FDI) in the manufacturing sector also fell to US$ 8.4 billion in 2015-16 from US$ 9.6 billion in 2014-15.

The BJP’s failure in creating jobs is evident with the rise in the unemployment rate across the country.

As per the Economic Survey 2015-16, the rate of unemployment has increased from 3.8% (2011-12) to 5% (2015-16).

Moreover, an International Labour Organisation (ILO) report on global trends released in January this year said, “Unemployment in India is projected to increase from 17.7 million last year to 17.8 million in 2017 and 18 million next year”.

Defence Sector:

The government is pushing Make in India in the defence sector, and the United States (US) is committing to its earlier agreement of making India a major defence partner under the initiative.

However, reportedly, the proprietary technology will be in control of US defence firms, according to a business lobby group’s letter to India’s defence minister.

“Control of proprietary technologies is a major consideration for all companies exploring public and private defence partnerships,” the business lobby, which represents 400 firms, said in the August 3 letter.

IT Sector:

Information Technology (IT) Minister Ravi Shankar Prasad on 24 September said that 95 mobile manufacturing companies have set up their plants in the country, calling it an achievement over the last three years.

“Today 95 mobile manufacturing factories have come up in India and India is becoming a big hub of electronics and mobile manufacturing. Of these, 32 units have come up in Noida and Greater Noida,” Prasad said at the Capital Foundation Annual Lecture here.

However, with progress only in mobile manufacturing – a global phenomenon – Narendra Modi’s Make in India initiative has recorded no major accomplishments.

So as the central government continues to claim that the ‘lion is on the move’, but with the poor implementation of demonetisation and the Goods and Services Tax (GST) policies, the lion is actually moving backwards.