MAKE IN INDIA 2.0
The author of this blog is Sai Hasitha, IV Year BBA.LL.B student at Presidency University, Bangalore.
India has been termed as a developing country and after 72 years of independence it is still called so. I believe one of the central causes for the same is the foreign markets rule the roost of Indian markets. The main cause of this stagnation in the economy could be the fact that Indian consumers have built an opinion that products from the foreign market are cheaper and offer more variety. But, they are unaware that they are indeed causing economic loss to India.
In order to address this situation, the Prime
minister of India has come up with the campaign viz. ‘Make in India’. The main
aim of this campaign is to facilitate investments from across the world and
strengthen Indian markets[1].
The government wanted to boost the crawling manufacturing sector and stimulate
the growth of economy. It also intended to spur the businesses from abroad to
invest in India and also manufacturing the products here, so that it causes to
improve the ‘ease of doing business’ index. The long term outlook is to
gradually enhance India into a Manufacturing Hub thereby also raising
employment opportunities in India.
Make in India, initially did not get much
support for many reasons like it was introduced into many sectors, it was also
difficult for the people to accept Indian products over their accustomed ones.
The earlier policy also lacks implementation and shows the unpreparedness of
policy makers[2].
Influx of foreign investment should be
pleased in India in a manner that is favorable for our economy. It should
empower us to achieve our intended goals like eradication of poverty, removal
of unemployment and economic development[3].
After all, ‘Make in India’ is one of such plan of actions that drives India a
developed nation with rapid speed. But the sad reality remains that “Make in
India” has persisted only as a catchy slogan.
It is the appropriate time for the Indians to
make this slogan a reality. The current COVID situation has shown the world
that globalization, which we almost started terming as basic is actually a
privilege. It is to be understood that the pandemic has brought both challenges
and opportunities.
China is considered as a manufacturing hub
and it has almost every kind of manufacturing unit setup. Though China has
trade surplus but it has now metamorphosed into trust deficit, as it has been
gaining benefits of Research and Development that are carried in other
countries without even expending on it[4].
Because of which all the countries want to withdraw their investments,
especially in manufacturing sector. This is to be considered as golden
opportunity to build New India. Whereas India has gained in trust by not only
taking care of its citizens but also by helping its friends and people up all
over the world. It has proven that in the time crisis, India as friend can step
up[5].
India is also considered a great spot for
foreign investments after its raise in ease of doing business rank,
introduction of GST regime and Insolvency laws. It is an appropriate
opportunity to re-launch Make in India policy with more concentration of
implementation methods.
In addition to these, in September 2019, the
government reduced the corporate tax rate from 30% to 25%, while the same has
been reduced to 15% for those companies that want to set up new factories. It
is worth noting that the corporate tax in India is lowest among South-Asian
countries[6].
Furthermore, India is also supplying hydroxychloroquine drug to almost 55 COVID-19
affected countries. This is to be considered as one of the steps towards making
India as the destination for the global investors. Besides, India’s credibility
is ascending, our preventive national lockdown has suppressed the spread of
virus to an extent and the same is acknowledged internationally. This is the
courageous step taken by the government with an aim that the nation will get
back to its former economic status post COVID-19. We were not terrified by the
after math of pandemic. This shows the conviction of the nation towards its
citizens and economy.
Many global players in industries ranging
from pharmacy to automobiles and apparel are now actively scouting locations in
India such as IKEA, Cisco, and Apple. From the US alone, there are reports
of over 200 firms looking to move manufacturing
operations from China to India. The post-corona world will require
global companies to be able to swiftly source vital inputs from around the
world. India is thus ideally suited to become a global manufacturing and
services hub[7]. India has
to grasp these opportunities and preset itself as a feasible alternative
manufacturing hub. On the other hand well-known economist Arvind Panagariya has
said that it is possible that multinational companies will shift their
operations from China in the wake of the Covid-19 epidemic, which India should
take up and create long-term jobs in the formal sector[8].
This is the time to expedite our efforts to
make India a manufacturing hub. The earlier Make in India policy must be
rebooted to achieve the same. It should possess the attributes that would make
the policy a reality. In a situation like this it gives the consumers as well
as the manufacturers have an opportunity to realize that we can strengthen the
Indian markets by “Going local” rather than “Going Global”
[2]Suresh Babu, Why ’Make in India’
failed, The Hindu, 20 January 2020, available at https://www.thehindu.com/opinion/op-ed/why-make-in-india-has-failed/article30601269.ece
[3] Irshad Mir, “Strategic Importance
of ‘Make in India’ Campaign to Empower Indian Economy”, Imperial Journal of
Interdisciplinary Research (IJIR), Vol. 3, Issue 3, 2017
[4] Ibid.
[5] Covid-19 has given India chance to
replace China as manufacturing hub: USISPF, Live Mint, April 23 2020, available
at https://www.livemint.com/news/world/covid-19-has-given-india-chance-to-replace-china-as-manufacturing-hub-usispf-11587609543270.html
[6] Arun Kumar Chaubey,India may
become new global manufacturing hub as coronavirus crisis ends, Zee News, April
30 2020, available at https://zeenews.india.com/economy/india-may-become-new-global-manufacturing-hub-as-coronavirus-crisis-ends-2280052.html
[7] Jayant Sinha, In corona crisis lies India’s
opportunity to make huge economic gains, The Print, April 7, 2020, available
at https://theprint.in/opinion/in-corona-crisis-lies-indias-opportunity-to-make-huge-economic-gains-jayant-sinha/396698/
[8] Vanshika Chopra, Opportunity Alert! Manufacturers
From China Eager to Set Up Manufacturing Base In India In The Wake Of
Coronavirus Crisis, Inventiva, April 2,1 2020, available at https://www.inventiva.co.in/trends/vanshika/opportunity-alert-manufacturers-from-china-eager-to-set-up-manufacturing-base-in-india-in-the-wake-of-coronavirus-crisis/
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