CONCEPT – MANUFACTURING IN INDIA

Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!

 CONCEPT – MANUFACTURING IN INDIA

---

Read more on - Polity | Economy | Schemes | S&T | Environment

---

• Introduction : Manufacturing has emerged as one of the high growth sectors in India. PM Narendra Modi launched the ‘Make in India’ programme in 2014 to place India on the world map as a manufacturing hub. India was expected to become the fifth largest manufacturing country in the world by the end of year 2020.
• Size of the sector : Under the Make in India initiative, the Government aimed to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022, from 16 per cent, and to create 100 million new jobs by 2022. Business conditions in the Indian manufacturing sector continue to remain positive. But results have not flowed as expected, at all.
• Investments : With 'Make in India', India tried becoming the hub for hi-tech manufacturing as global giants such as GE, Siemens, HTC, Toshiba, and Boeing, which either set up or were in process of setting up manufacturing plants in India. Cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$ 46.62 billion during April 2000-December 2018. The govt. is not pushing government investments, but is using private investments as the chosen route (that is directly opposed to what happened in the 1950s and 60s).
• Some new initiatives : The Government took initiatives to promote a healthy environment for the growth of manufacturing sector. Some were - 

1. In October 2018, it released the draft National Policy on Electronics (NPE) which has envisaged creation of a US$ 400 billion electronics manufacturing industry in the country by 2025. 
2. In September 2018, it exempted 35 machine parts from basic custom duty in order to boost mobile handset production in the country. 
3. It is in the process of coming up with a new industrial policy which envisions development of a globally competitive Indian industry. 
4. In the Union Budget 2018-19, the Government reduced the income tax rate to 25 per cent for all companies having a turnover of up to Rs 250 crore (US$ 38.75 million). 
5. In the Union Budget 2018-19, the Government reduced the income tax rate to 25 per cent for all companies having a turnover of up to Rs 250 crore (US$ 38.75 million). 
6. Under the Mid-Term Review of Foreign Trade Policy (2015-20), the Government of India increased export incentives available to labour intensive MSME sectors by 2 per cent. 
7. The Government launched a phased manufacturing programme (PMP) aimed at adding more smartphone components under the Make in India initiative thereby giving a push to the domestic manufacturing of mobile handsets. 
8. The Government is in talks with stakeholders to further ease foreign direct investment (FDI) in defence under the automatic route to 51 per cent from the current 49 per cent, in order to give a boost to the Make in India initiative and to generate employment. 
9. The Ministry of Defence, Government of India, approved the “Strategic Partnership” model which will enable private companies to tie up with foreign players for manufacturing submarines, fighter jets, helicopters and armoured vehicles. 
10. The Union Cabinet has approved the Modified Special Incentive Package Scheme (M-SIPS) in which, proposals will be accepted till December 2018 or up to an incentive commitment limit of Rs 10,000 crore (US$ 1.5 billion).

• Road Ahead : India is an attractive hub for foreign investments in the manufacturing sector. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country. The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors. 

Read more on - Polity | Economy | Schemes | S&T | Environment

Join UPSC Self Prep course | Online Course (PT Gurukul)  | Covid Special Course | Join PT courses

* Content sourced from free internet sources (publications, PIB site, international sites, etc.). Take your own subscriptions. Copyrights acknowledged.