INTRODUCTION:

The main objective of ‘Make in India’ campaign is to consider it as a major national program designed to enhance skill development, facilitate investment, foster innovation, protect intellectual property and highly advanced manufacturing infrastructure. Seeking to make India a global manufacturing hub, Prime Minister Narendra Modi launched the ambitious ‘Make in India’ campaign in the presence of global and domestic industrialists on 25-September-2014.

This ‘Make in India’ campaign may attract foreign multinationals to build their manufacturing units in India itself and will impact the Indian manufacturing sector positively. 'Make in India' or 'Invest India' campaign will be the first initiative to attract foreign investors. It will act as a guide which would provide help on regulatory and policy issues, and assist in obtaining regulatory clearances.

India is well-known for its workforce that makes it as world largest exporter of services, but many doubt its ability to produce and export manufactures and that is the perception which our Prime Minister Modi wants to change. For making his own initiative possible on practical grounds, Prime Minister Modi rolled out a red carpet to industrialists, both domestic and international, inviting them to make investment through FDI’s (Foreign Direct Investments) and purposefully making India a manufacturing hub that will boost Indian economy and jobs opportunities in India. The campaign is backed by full proof planning of dedicated cabinet ministers and bureaucrats and the government is pulling out all the steps for ensuring a smooth sailing for investors, by setting up a dedicated cell to answer queries of business entities within 72 hours. All this steps will give positive effects and help economy to grow. It will help in boosting growth, in job creation and revival of investment cycle in Asia's third largest economy.

The government will select domestic companies having leadership in innovation and new technology. The idea is to turn these into global champions and promote green and advanced manufacturing and help these companies to integrate into global value chain. The once booming services sector has slowed, but it is the manufacturing sector that has performed especially poorly by recording an expansion of barely 1.1 percent growth in 2012-13 followed by the contraction of 0.7 percent in 2013-14 India’s Make in India campaign has been positioned in such a way that will be unwontedly compared with China’s ‘Made in China’ campaign. The World’s fastest growing economy launched the campaign at the same day as India seeking to develop its image as “Manufacturing hub”. India should constantly upgrade its technology and enhance its strength so as to surpass China’s supremacy in the manufacturing sector.

The government has started taking all possible steps to lure global investors and has been very particular about issuing strict guidelines to all ministries asking them to give preference to domestically manufactured electronic products, a move aimed at boosting electronics production to bolster the "Make in India" drive. All government departments have been instructed to follow a tender template already issued by the department of electronics and information technology, for acquirement of electronic items. This will boost the sales of domestically manufactured items which will ultimately foster the Indian economy.

FDI and Economic Growth in India:

Bearing in mind the national interests, policy makers designed the policy of FDI as a means to acquire advanced technologies and mobilize foreign exchange. In the critical face of the Indian economy, the Government of India with the help of the World Bank and IMF introduced the macroeconomic stabilization and structural adjustment program. As the result of this reform India opened its doors for FDI inflows and adopted a more liberal foreign policy in order to restore the confidence of foreign investors. According to GYANPRATHA- ACCMAN Journal of Management, Volume 5, Number 1.2013) FDI for 2009-10 at US $ 25.88 billion was less than 5 per cent from US $ 27.33 billion in the previous fiscal. Foreign direct investment in August plunged by about 60 percent to approx. $ 34 billion, the lowest in the data of the Ministry of Industry in fiscal 2010 released published showed. In 2013, the government standards of FDI in several sectors, including telecommunications, defense, PSU oil refineries, power exchanges, and exchanges of shares among others. In detail, TESCO in the UK presented its application to initially invest $ 110 million to launch a chain of supermarkets in collaboration with Trent, an initiative of TATA group. In civil aviation, Malaysia-based Air Asia and Singapore Airlines have teamed up with the Tata Group to launch two new airlines services. Also, Abu Dhabi Etihad picked up a stake of 24 percent in Jet Airways which was worth over Rs 2,000 crore (US $ 319.39 million).

India has received total foreign investment of US$306.88 billion since 2000 with 94 percent of the amount coming during the last nine years. During FY 2012-13, India attracted FDI worth US$ 22.42 billion. Tourism, Pharmaceuticals, services, chemicals and construction were among the biggest beneficiaries. The January- November period in 2013witnessed mergers and acquisitions deals worth US $ 26.76 billion in India, according to a survey by tax advisory firm Grant Thornton.

Major Economic Reforms:

The economy of India had undergone significant policy shifts in the beginning of the 1990s. This model of economic reforms is commonly known as the LPG model or Liberalization, Privatization and Globalization model. The primary objective of this model was to make the economy of India as the fastest developing economy on the globe with capabilities that helps it match up with the biggest economies of the world. The chain of reforms that took place with regards to business, manufacturing, and financial services industries targeted at lifting the economy of the country to a more proficient level. These economic reforms had influenced the overall economic growth of the country in a significant manner.

Effects of ‘Make in India’ Campaign on the Indian Economy

1. Encouraging foreign investors:

Investment by both international and domestic companies has decreased in recent years. While foreign direct investment has pushed up in 2013, sentiment was largely skeptical. Some of the measures taken by India in recent years have been seen to be hostile to foreign companies. A bitter tax row with Vodafone and policies flip flops made investors worried. The Union Cabinet has approved FDI proposals in the areas of defense and railways. In defense, the investment cap was increased from 26 to 49 percent, while in the railway sector, some projects were allowed 100 percent FDI. Considered to be the first major economic reform by the new government NDA, the Committee of Economic Affairs Office (CCEA) approved an increase in foreign direct investment (FDI) cap in insurance from 26 percent to 49 percent. This will ensure more capital in the insurance sector. Even the investment cap is raised to 49 percent; the complete management control will remain with the Indian entity.

2. GDP on the rise:

The Indian economy grew at its fastest pace in more than two years during the April-June quarter, revitalized by a decisive political mandate for the Narendra Modi-led BJP and subsequent actions by his government, suggesting that growth can be lasted long. India's GDP grew at 5.7% in the first quarter of 2014-15, exceeding expectations. This was the fastest pace since the fourth quarter of fiscal 12, while being considerably higher than the 4.6% increase in the previous quarter. Both the IMF and the World Bank see India's growth may reach 7.5 percent in 2015 from 7.2 percent the previous year, but assessments for 2016. IMF, which last January 2015 forecast a growth of 6.3 percent in 2016 and growth of 6.5 percent, penciled in 7.5 percent growth next year while the World Bank in 2016 the figure above 7.9 percent . The bank last January hook the 6.4 percent growth rate this year and 7 percent in 2016. The Centre had budgeted growth of 8.1-8.5 percent of GDP in the year to end March here 2016.

3. Inflation on a low-down:

The inflation rate in India was recorded at 7.96 percent in July 2014. Inflation rate in India averaged 9.49 percent from 2012 to 2014, reaching a record of all time 11.16 percent in November 2013 and a record low of 7.31 percent in June 2014.

4. Sensex on all time high:

Investors have experienced a bullish trend in the Indian stock market since the day it was announced that Mr Narendra Modi would be the BJP led NDA’s prime ministerial candidate. After the Lok sabha poll results, Sensex expanded gains for the sixth straight session and also gained for the seventh straight month, rising the most in May, after the Modi-led NDA government took charge and announced a slew of initiates that helped improve business sentiment and lifted the economy back on the growth track. Both the benchmark share indices gained record closing highs.

The 30-share Sensex reached at 30,000 mark after hitting a fresh intra-day high on March 4, 2015. For the nine months since March 2014, the benchmark index surged nearly 37%. Tracking the momentum, the 50-share Nifty index also breached 9,100 levels for the first time.

5. Announcement of Good and Services Tax (GST):

GST will result in a change in the tax firmament by redistributing the weight of equitable taxation between manufacturing and services. It will reduce the tax rate by broadening the tax base and minimizing exemptions. It will reduce distortion by completely switching to the destination principle. It will promote a common market across the country and reduce the costs of compliance. It will facilitate the investment decisions made on purely economic concerns, independent of tax considerations. It will promote exports. GST will also promote employment. Above all, it will boost growth.

6. Growth of Manufacturing Sector:

On August 15, 2014, Prime Minister Narendra Modi, in his inaugural speech on Independence Day, calls for businesses around the world to come to India '. He urged world powers to "Come, manufacture in India”. Sell in any country of the world but make your product over here. We have skill, talent, discipline and determination to do something.

7. Bringing Black Money:

The government's decision to set up a special investigation team (SIT), headed by former Supreme Court judge MB Shah, to unearth illegal money hidden in tax havens. The SIT has already prepared a comprehensive action plan, including the creation of an institutional structure that could allow India to fight against black money.

8. Infrastructural Development:

“Economy is bleak without Infrastructure. Hence, the prime focus of my government is Infrastructure.”

Shri Narendra Modi

The focal point of the Union Budget 2014 was infrastructure, a sector which was neglected in the last 10 years under the Congress-led UPA rule. The Government has attracted large-scale investments in infrastructural sector by reviving the Special Economic Zone (SEZ), streamlining the Public Private Partnership (PPP) models and creating Infrastructural Investment Trusts (InvITs). Work for the ambitious Diamond Quadrilateral rail network — connecting major metros across the country — is in the full swing. The Government has laid the groundwork for its ambitious ‘100 smart cities’ project. To develop infrastructure in rural areas, the Government has launched Syama Prasad Mookerjee Rurban Mission and Deendayal Upadhyaya Gram Jyoti Yojana. The Government is also working on strengthening and modernizing the boarder infrastructure.

9. Bringing Economy Back on Track:

In a bid to arrest inflation, Government asked States to delist fruits and vegetables from the Agriculture Produce Marketing Committee (APMC Act). This decision has protected farmers from the middle men and succeeded in preventing hoarding. This in turn has helped in taming inflation. With inflation on check, economic growth is picking up steadily. It is important to note that Indian economy has thrown up the best growth figures in two-and-a-half years. The GDP growth in April-June quarter is the highest in the last nine quarters. This is a sufficient indication that economy is turning around.

Six ways Modi’s ‘Make in India’ Benefits our Country:

1. Kick Start Robust Hiring as Government invests in industrialization:

With the introduction of Make in India campaign, rapid industrialization can be achieved with the help of government investment in all sectors. To restart the process, our government will pump investment in various sectors which will eventually increase the industrialization process. The campaign has certainly provided the necessary thrust to push the decelerating Indian economy on the mission of growth. This initiative will bring positive impact on job creation and skills development.

2. Improve GDP Contribution manufacturing:

Major focus of Make in India campaign is on the manufacturing sector of our economy. With the increase in the manufacturing sector, our country will be able to reduce imports which will eventually increase the Gross Domestic Product of our country.

3. Improve GDP Contribution from manufacturing:

Major focus of the campaign is on the manufacturing sector of our economy. With the increase in the manufacturing sector, our country will be able to reduce imports which will eventually increase the Gross Domestic Product of our country.

4. Focus on manufacturing will stimulate growth in other sectors:

The focus on manufacturing will drive the development of other key sectors such as infrastructure and energy, they serve as growth catalysts. As it is known that the development of a country depends on its manufacturing sector and the introduction of Make in India campaign, India can achieve growth of this major sector of the economy.

5. Make in India will promote human capital at grass root level:

The skilled labor demand is widespread in the international labor market. Taking steps to meet this demand, the Prime Minister is focused on the skill development in its "Make in India 'and' Deen Dayal Upadhyay-Grameen Yojana Kaushalya (DDU-GKY)" campaigns. These initiatives will promote human capital at the roots of the grass.

6. Transforming Domestic Manufacturers into global multinationals:

This is a major advantage of "Make in India 'campaign which will develop the nation. With the emphasis on the manufacturing sector, the campaign aims to make India a global manufacturing hub.

7. Enabling Indian manufacturing to become globally competitive

Offering different benefits of "Make in India 'campaign, the Indian manufacturing will develop and that will ultimately make it competitive globally.

Five Challenges that the ‘Make in India’ campaign could face

1. Abolition of Red Tapism

Creating healthy business environment will be possible only when the administrative machinery is efficient. But, with the excessive interference of bureaucracy, ‘Make in India’ campaign can face challenge to implement effectively.

2. Stringent Tax Regimes

Due to the presence of stringent rules relating to the tax regimes, the ‘Make in India’ campaign can face problem for efficient implementation. To make it a success, our government must ease the burden of tax from the manufacturing sector so that it can blossom.

3. Ignorance of MSMEs

It has been seen that the MSMEs (Micro Small and Medium Enterprises) sector of our country lacks in contributing to the development of our nation. This can also hinder the success of ‘Make in India’ campaign.

4. Lack of R and D

This is also a major challenge which will affect the success of ‘Make in India’ Campaign. It is due to the lack of research and development our country lags behind in terms of development in core sector. To make ‘Make in India’ Campaign a success story, our country must also focus on the research and developmental activities.

5. Lack of Consistency

This can also be a barrier in the success of ‘Make in India’ Campaign. There must be a consistency in the implementation and functioning of the campaign so that it can give fruitful results to our nation.

CONCLUSION:

The ‘Make in India’ campaign will bring the positive results for the economy of India which has been facing very bad time since last 8 years and the optimism showed by the MNC’s and delegates of different foreign countries has made this initiative more effective and influential. The struggling manufacturing sector will be revived through new investment and it will increase the employment opportunities in India. Though, there are certain challenges which could be overcome by sincere efforts. Prime Minister Narendra Modi has got the experience of managing Gujarat which will help as an engine for this campaign.

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Received on 07.05.2015 Modified on 26.06.2015

Int. J. Ad. Social Sciences 3(2): April-June, 2015; Page 61-65