Make In India

Mon, Aug 31, 2015

In Focus

Standing in this 21st century junction, when the world is talking about innovation for sustainable economy, the new campaign initiative titled as “Make in India” launched by our new government is really a strategy to consider. Considering the present business scenario of our country, only 15% of the GDP comes from the manufacturing domains. Whereas growing economies like China, Korea, Japan are already having this figure in the range of 25-35% and that too increasing year by year. So, it’s a right time or rather a perfect moment when the government of India has decided to give the country’s manufacturing sector a major boost by inviting foreign investors in various means to set up production units at various corners of the country.

The clear cut advantages that we can observe thorough the success of this campaign are export dependent growth, which will result in a stronger INR and to cap it all, more and more job creation at different segments would take place.  Companies like Samsung , Sony are already responding to this initiative launched by our prime minister last year and have started working to set up plants in different parts of the country. Not only that, Indigenous home grown big shots like the Kalyani Group, Tata Group and Mahindra Group are also working hard these days to win some of the prestigious government contracts on defense equipments and upgradation.  E-commerce giant Alibaba has also expressed interest to start operations here. The promise of the government to create a holistic environment for business by removing the so called red tape formalities as much as possible has eventually resulted in a great response.

But with all these success stories, people have started asking some genuine questions also; asking the long term viability of an export dependent powerhouse like China. The Chinese economy is not in very good shape these days; labor rate hikes and too much dependency on export economics have hit the country in various manners. Even, our very own Governor of Reserve Bank had raised doubt at some point, whether this campaign may fetch any sustainable economic benefit for the country as a whole or not.

Well!! To carry forward the argument there are two major views. First of all, considering the huge market potential, our country itself is having, this campaign may have suited well as “Make for India” rather than terming it as “Make in India”. The vast segment of our rural market and lower tier cities are still not penetrated properly. The Make in India initiative may only become a very viable option once the internal needs are catered and the balance produce is kept for exporting. Secondly, the government’s proposal for FDI investment is coming only in the mode of manufacturing and that’s why we are seeing this sort of enthusiasm in government bodies and institutions to make this campaign a huge success. But, the strategy could have been different and entrepreneurs should have been provided the freedom of their choice of investment. It might have happened that observing India’s too much zeal for becoming a manufacturing hub, some of the potential investors in the service domain have left.  Or, India may have already lost some of the potential e-commerce players. So, the freedom of choice of doing a business and where to invest should completely lie on the investors and should not be guided by any government protocols.

Another important matter of concern is that, for making this initiative a successful one, India should be equipped with sufficient supply chain infrastructure make over throughout the country. Uninterrupted power supply, better internet and digital connectivity , dedicated freight corridors, better managed and maintained national highways are some of the very basic requirements to turn this boom into reality. Some of the key projects like “Digital India”, “Smart City Campaign” etc are basically the associated part of “Make in India”. The overall integrated program of turning India into a global manufacturing nucleus can only become successful if and only if the other ancillary campaigns and initiatives see the joyous colours. And last but the not the least, the 125 Crore people of the worlds’ largest democracy have to have the belief in themselves that yes they are capable to transform their image in front of the world.

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Kinsuk Ghatak

MBA 2015-17

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