Mak­ing sense of ` Make in In­dia'

Man­u­fac­tur­ing needs to get a boost. But what to man­u­fac­ture and how are two crit­i­cal ques­tions


PRIME MIN­IS­TER Naren­dra Modi’s “Make in In­dia” slo­gan is slowly be­gin­ning to cap­ture the imag­i­na­tion of both his sup­port­ers and de­trac­tors. Start­ing from his In­de­pen­dence Day speech, where he first made the com­ment, to his re­cent US trip, where he turned it into an in­stru­ment to get for­eign in­vest­ment, the coun­try is get­ting to know what this cam­paign is all about.

The “Make in In­dia” cam­paign aims to make In­dia the man­u­fac­tur­ing hub of the world, chal­leng­ing China’s dom­i­nant po­si­tion in the world of man­u­fac­tur­ing. Modi has linked this to cre­ation of em­ploy­ment to en­cash the de­mo­graphic div­i­dend. In sim­ple terms, com­pa­nies will come to In­dia to man­u­fac­ture prod­ucts in­stead of just mar­ket­ing them here. This will cre­ate jobs for peo­ple, fu­elling eco­nomic growth. This is where the cam­paign seems to be out of sync with the em­ploy­ment re­al­i­ties of In­dia.

It is not for the first time the gov­ern­ment is fo­cus­ing on the man­u­fac­tur­ing sec­tor to boost eco­nomic growth and gen­er­ate em­ploy­ment op­por­tu­ni­ties. In­dia’s dom­i­nant em­ployer—the agri­cul­ture sec­tor—is no longer able to ab­sorb the in­crease in labour force. The re­cent in­crease in non-farm em­ploy­ment is mostly due to the rise of the ser­vice sec­tor. But as both the sec­tors are now star­ing at stag­na­tion, man­u­fac­tur­ing has to be the next big em­ployer. Ex­pe­ri­ences of de­vel­oped coun­tries show that this is the tra­jec­tory they have fol­lowed.

Way back in 2011,for­mer prime min­is­ter Man­mo­han Singh de­clared the Na­tional Man­u­fac­tur­ing Pol­icy. This was the first at­tempt to fo­cus on this cru­cial sec­tor.But in the past three years, we did not see much im­pact. In­dia needs to cre­ate 220 mil­lion jobs by 2015. The man­u­fac­tur­ing pol­icy aims to cre­ate 100 mil­lion jobs by 2021 by in­creas­ing the share of the man­u­fac­tur­ing sec­tor in gdp to 25 per cent from the cur­rent 16 per cent. Modi’s

“Make in In­dia” just car­ries for­ward this pol­icy. But the prob­lem arises when one gets down to an­a­lyse what to man­u­fac­ture, where and how. A glance at the of­fi­cial web­site of the cam­paign lists 25 sec­tors that will be in fo­cus for man­u­fac­tur­ing.Of th­ese,22 are re­lated to heavy in­dus­tries and in­volve spe­cialised tech­nol­ogy that In­dia cur­rently de­pends on oth­ers to pro­vide. This means, the com­pa­nies will just set up shops, use cheap and vul­ner­a­ble labour force and lots of gov­ern­ment in­cen­tives to man­u­fac­ture prod­ucts.

This is pre­cisely the main hur­dle for the cam­paign to achieve its ob­jec­tives. Mod­ern man­u­fac­tur­ing is cap­i­tal-in­ten­sive and is al­ready em­ploy­ing fewer and fewer peo­ple. More­over, the tar­geted In­dian labour force may not have the right skills. And, as the com­pa­nies have been com­plain­ing in the past three years, man­u­fac­tur­ing in­volves large-scale land and wa­ter re­sources which they are not able to get. This brings the cam­paign back to the clichéd en­vi­ron­ment ver­sus de­vel­op­ment de­bate.

The re­al­ity is that the In­dian labour force is more skilled in tra­di­tional oc­cu­pa­tions, such as hand­i­crafts, tex­tile and agro-based ac­tiv­i­ties. Dur­ing the for­mu­la­tion of the 12th Five Year Plan this is­sue came into fo­cus and ex­perts agreed that man­u­fac­tur­ing as we un­der­stand in mod­ern times would not fetch In­di­ans jobs. Rather, re­fo­cus­ing on In­dia’s tra­di­tional oc­cu­pa­tions could po­ten­tially cre­ate 10 mil­lion jobs a year. At the time of In­de­pen­dence, In­dia was a global hub of man­u­fac­tur­ing, with most of the sec­tors fo­cus­ing not on in­dus­trial prod­ucts but on tra­di­tional oc­cu­pa­tions us­ing the vast re­sources.The global de­mand for In­dian hand­i­crafts and tex­tile is still high. It still em­ploys close to 25 mil­lion peo­ple. And is right­fully a made-in-In­dia skill. This is the mes­sage for the new cam­paign: a “make in In­dia” pol­icy must have made-in-In­dia skills as its in­evitable in­gre­di­ents.


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