Make in India: Tough task ahead

Prime Minister Narendra Modi’s Make in India programme, which was launched last week, has the potential to transform the country if the ideas that underlay the initiative are translated into policies and action. It was launched with the full involvement of the industry which is going to be its focal point.

The idea of making the country the manufacturing hub of the world has been the repeated theme of Modi’s electoral campaign and new government’s statements of intent since it came to power. There is a set of conditions which are favourable for the new initiative.

The current account deficit is low, inflation may be showing signs of easing and there is a sense of better political and economic purpose in the government. The challenge is to create the right environment and formulate and implement policies with speed and efficiency. 

Modi has called upon the industry — both domestic and foreign — to be engaged in this enterprise and has promised full support. The rephrasing of FDI as First Develop India is a catchy turn of phrase, and he wants concrete results in a short span. There is now an opportunity for India to shift the flow of global investment to it because of changing external situations.

It is necessary for the country to enlarge its manufacturing sector, because it has to cater to a growing population and satisfy the need for more employment avenues and social and economic justice. But the sector has not performed well in recent years. Modi has gone beyond the framework of self-reliance by telling investors to “sell anywhere but manufacture here’’.

There is realisation in it of the inter-relatedness of the global economy. A domestic strategy that caters to both domestic needs and exports is envisaged, and the policies will have to be fine-tuned for this. 

Twenty five industries have been identified in which India can be a world leader. To make the programme take off, the ease of doing business in the country has to be significantly improved.

This will call for changes in laws, rules and regulations on a wide scale. More investment-friendly policies have to be framed and implemented. Infrastructure development has to be given paramount importance. The entire government machinery should become active facilitators of development.

It is most vital that the states are taken fully on board on the new programme, because the action actually takes place at their level and they are responsible for many clearances and facilities needed by the industry. A lot of hard work is needed to turn slogans into factories.