Down to Earth

Making sense of ` Make in India'

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

- RICHARD MAHAPATRA

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.

 ?? TARIQUE AZIZ / CSE ??
TARIQUE AZIZ / CSE

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