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30INTERNATIONAL JOURNAL OF THEORETICAL AND PRACTICAL RESEARCH
DOI
International journal of theoretical and practical research
Scientific Journal
Year: 2021 Issue: 1 Volume: 1 Published: 01.11.2021
http://alferganus.uz
Citation:
Dr.R. Lilambeswara Singh, St.Johns. (2021). Make in
India - a global manufacturing hub. SJ International ^^^^^^
journal of theoretical and practical research, 1 (1),6-12
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Doi: https://dx.doi.org/10.5281/zenodo.5728467
QR-Article
DOI 10.5281/zenocfo.572B4G7
Dr.R. Lilambeswara Singh
Prof.in. Management St.Johns
College of Eng.& Technology, Yemmiganur, Kurnool.Dt.Andhra Pradesh, India
MAKE IN INDIA - A GLOBAL MANUFACTURING
HU
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Abstract: This research paper aims to identify some of the key challenges in the path of development and recommend possible solutions to deal with the same. This paper has been able to identify the following major challenges in the path of making India a global manufacturing hub and accordingly make a few suggestions regarding possible solutions to deal with each of the issues: Improving the ease of doing business in India, Improving the employability of general and engineering graduates, Infrastructure development of major roads and highways in the country, Capacity addition in the power sector to meet industrial energy demand. It is to be noted that the above list is not exhaustive and there are lot of other ample challenges towards making India a global manufacturing hub. However, focusing on these issues and taking adequate measures to deal with the same will go a long way towards turning the "Make in India" vision into a dream come true.
Keywords: global, manufacturing, hub, Infrastructure, development.
Д-р Р. Лиламбесвара Сингх
Профессор менеджмента, С.Джонс
Колледж инженерии и технологий, Йеммиганур, Курноол. Дт.Андхра Прадеш, Индия.
СДЕЛАТЬ В ИНДИИ - ГЛОБАЛЬНЫЙ ПРОИЗВОДСТВЕННЫЙ
ЦЕНТР
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Аннотация: Данная исследовательская работа направлена на выявление некоторых ключевых проблем на пути развития и рекомендации возможных вариантов для их решения. В этом документе удалось выявить следующие основные проблемы на пути превращения Индии в глобальный производственный центр и, соответственно, внести несколько предложений относительно возможных решений для решения каждой из проблем: повышение удобства ведения бизнеса в индии, улучшение возможностей трудоустройства выпускников общего и инженерного профиля, развитие инфраструктуры основных дорог и автомагистралей в стране, увеличение мощностей в энергетическом секторе для удовлетворения промышленного спроса на энергию. Следует отметить, что приведенный выше список не является исчерпывающим, и существует множество других серьезных проблем на пути превращения Индии в глобальный производственный центр. Однако сосредоточение внимания на этих проблемах и принятие адекватных мер для их решения будет иметь большое значение для превращения концепции "Сделать в Индии" в воплощение мечты.
Ключевые слова: глобальный, производство, хаб, инфраструктура, развитие.
Introduction
B M I Je \ A jmb -^gm i _ i i H M
That day, Indian Prime Minister Narendra Modi ad-dressed an audience of 500 ■ 1 %
domestic and international entrepreneurs in New Delhi, in an atmosphere charged with euphoria following the success of India's first mission to Mars the previous day. Modi inaugurated a campaign aimed at transforming India into a global manufacturing hub and at easing its business climate for both domestic and foreign investors. A logo, a portal and brochures detailing 25 priority sectors were introduced that day. The logo shows a striding lion made of cogs with the campaign name across its body.
The stock market boom at the clear mandate given to BJP in the 2014 Lok Sabha elections and the current stock market scenario was a clear indicator of investor confidence in the Narendra Modi Government. Further steps by Mr. Modi like the "Make in India" and "Digital India" campaigns, invitation to the leaders of all the SAARC countries, US and Japan visit and various business friendly reforms have significantly created a positive business environment in the country.
However, there are certain bottlenecks in the economy which the Government needs to address towards making India a global manufacturing hub. This research paper aims to analyze the key issues facing the "Make in India" vision and recommend possible strategies to deal with the same.
Discussion
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Recent policy measures and projects to open up India's manufacturing sector
are:
• 100 %Foreign Direct Investment (FDI) allowed in the telecom sector;
• 100 % FDI in single-brand retail;
• Validity of industrial license extended to three years;
• For all non-risk, non-hazardous businesses, a system of self-certification to be introduced;
• Process of obtaining environmental clearances made online.
• The Government of India is developing the Delhi-Mumbai Industrial Corridor (DMIC) as a global manufacturing and an investment destination utilising the 1,483 km-long, highcapacity western Dedicated Railway Freight Corridor (DFC) as the backbone.
FDI is defined as an investment in which the investor acquire a substantial controlling interest in a foreign industry. FDI involves ownership and/or control of the company abroad (Markusen, Melvin, Kaempler, and Maskus, 1995). FDI is driving the process of globalization by creating an increasingly tighter global production network. Many countries experiences good economic growth through FDI (Manning and Shea, 1989), such as FDI in developing countries (includes Latin America, Asia and Central and Eastern Europe) made a comeback in about 1994 (Krugman and Obstfeld, 1997; Han, 2004).
FDI flows as one of financing type in investment is expected to boost economy growth. FDI serves as a catalyst for rapid economic growth by enabling developing countries to leapfrog developmental stages and to catch up with advanced economies, it constitutes also an important advocate for improved social norms. In this respect, FDI plays a major role in the larger development agenda of the host countries. Two of the main social aspects of development i.e. employment and environment Nevertheless, the ultimate impact of FDI on domestic economic growth depends on the diffusion of best practice through the local economy at large. This diffusion process takes place through four main channels, i.e. backward linkages with local suppliers (sourcing), forward linkages with local producers and distributors, horizontal linkages with local competitors, and linkages with local institutions such as universities and research institutes as well as vocational training centers. To developing countries, the most important channel of these is usually sourcing, i.e. the purchase of inputs and services from local instead of foreign suppliers.
FDI flows to where fast economic growth has been recorded. Avirtuous circle is observed here: at same time that FDI contributes significantly toe- conomic growth, faster economic growth attracts more FDI because it increases foreigninvestors' confidence in the economy, which in turn pushes the growth rate even higher. In the
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least developed countries, studies have shown that FDI in fact follows, notproceeds, some initial growth or at least the promise of growth.
Additional Reasons for the New Initiative
Several pressing issues prompted the launch of this campaign. First and foremost, India needs to reboot its economy. After several years of gross national product (GNP) growth averaging 7.7%, between 2002 and 2011, this pace slowed down to around 5% in 2013 and 2014. India began the calendar year 2021 with an economy undergoing a deep recession as a result of the OVID-19 pandemic. According to the IMF and other leading international organizations, production in the country decreased by 8% in mid-2020 and by 10% in October of the same year1. In 2020/2021 fin. year (fiscal year in India from April 1 of the current year to March 31 of the next year) The country's GDP shrank by an estimated 7.7%. The decline in industrial production and services amounted to 9.6% and 8.8%, respectively. Weak signs of economic recovery emerged only at the end of 2020. - GDP growth was 0.4%, thus marking the country's exit from the technical recession.
India's GDP grew 20,1 percent in the second quarter from last year, slightly in line with economists' forecasts of 21 percent growth. The report of the Ministry of Statistics and Program Implementation showed that in the second quarter, growth was observed in various sectors of the economy. In trade, hotel and transport sectors, it amounted to 34,3 percent, in construction - 68,3 percent. The agro-industrial complex grew by 4,5 percent, the industrial complex - by 49,6 percent. The Indian rupee climbed to a peak since May and stocks hit new highs2.
Economic growth remained at 9.2 percent of GDP forecast for 2021, becoming the fastest among major economies, surpassing the 8.5 percent growth mark in China. High rates of coronavirus vaccinations have allowed people to live their lives as usual and reduce damage in services, and production figures were higher than expected, which contributed to record growth rates.
Second, India needs more jobs for its young people. Recently, on average, 5 million new jobs have been created each year, but around 12 million people join the workforce each year. This is the other side of the demographic dividend: India's labour force is expected to grow to 600 million by 2022. Job creation will fight poverty and help divert people from agriculture, which has a low capacity to sustain their livelihood.
1 https ://scroll.in/author/8
2 https://www.bloomberg.com/news/articles/2021-08-31/resilient-demand-keeps-india-on-track-to-world-s-fastest-growth?srnd=economics-vp
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Third, India's economic development model has been quite peculiar, offering privileges to skilled labour often employed by foreign companies. Conversely, other economies have achieved success by first providing incentives for job-creating manufacturing industries. That is why today manufacturing in China makes up 34% of gross domestic product. The Chinese have positioned themselves as the 'workshop' of the world, accounting for 22.4% of global manufacturing, while India accounts for only 2%. India's manufacturing sector is less productive compared to its competitors and accounts for only 15% of its GDP. The government has set a target of 25% of GDP by 2022.
Reaction to "Make in India"
"Make in India" has received widespread support from industry leaders from both India and abroad as well as from the Confederation of Indian Industry (CII). Some companies, including foreign ones, have already announced plans related to the initiative. Reserve Bank of India Governor Raghuram Rajanin dismissed the idea of introducing a policy targeting the manufacturing sector, just because it had worked for
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China, given how different the two countries are. He underlined the risks of an export-driven approach in a global economy still in crisis, and where many industrialized economies are strengthening their own manufacturing capabilities. "The world as a whole is unlikely to be able to accommodate another export-led China", he said.
C. K. Ranganathan, the founding chairman of popular Indian household brand CavinKare, said that he would rather support a "Made in India" approach in which India would be creating its own internationally renowned brands. Srikant Jena, a former government minister, stated that efforts to resolve caste and gender inequalities as well as regional imbalances were missing from the initiative.
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Conclusion
Although the ease of doing business score went down to 142 from 134 last year, the World Bank has taken care to distance this downslide from the NDA government which took charge barely a week earlier and World Bank has used data till May 2019 whereas most measures to improve doing business were undertaken subsequent to that. The various measures undertaken by the NDA Government to address issues related to economic growth, delay in Government decisions and reforms in the Labour law, Land law and taxation have kick started the manufacturing sector and shot the GDP growth by 5.7 % in the last quarter.
The Modi Government has also signed a staggering USD 35 Billion investment deal with Japan for infrastructure development.
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If governance continues in the current manner, we can definitely hope to see significant and sustainable growth in the manufacturing sector and progress towards India becoming aGlobal manufacturing hub.
References:
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