*Make in India*: the concept and the Central Government's measures for it

The concept of Make in India

Make in India is an initiative of the Government of India, launched on 25 September 2014, to encourage Indian as well as multinational companies to manufacture their products in India. It concentrates on 25 sectors of the economy. The idea, in short, is that India should become a place where goods are made, not only a place where they are sold.

The programme came against a particular background. Since the economic reforms that began in 1991, India has opened its economy to the world; today it is among the faster-growing economies and a preferred destination for foreign direct investment, with rising incomes, domestic consumption and a young population supporting growth. Initiatives such as Make in India, Skill India and Digital India are expected to help the economy in exports and imports and to keep the trade balance steady and sustainable.

Objectives of the programme

• Jobs and skills. Its major aims are creating employment and raising skills in its focus sectors.
• Investment in manufacturing. It seeks to bring domestic and multinational firms to produce in India, and it widened the room for foreign investment to support this.
• A better business climate. It treats the ease of doing business as crucial for promoting entrepreneurship, for start-ups and established enterprises alike.
• A healthier external position. With its companion initiatives it is expected to support exports and imports and a sustainable trade balance.

Measures taken by the Central Government

The Ministry of Commerce and Industry describes the programme as resting on four pillars. They are taken here starting with the change in the government's own attitude towards industry.

1. A new mindset in government. The government chose to act as a facilitator rather than a regulator, working in partnership with industry to drive the country's economic development. The aim was a collaborative environment that supports industrial growth and innovation.
2. New processes. Ease of doing business was identified as crucial for entrepreneurship, and several measures were taken to make the business environment more suitable for new and existing firms. For a first-time manufacturer setting up a small electronics assembly unit in Noida, such changes are meant to shorten the distance between a business idea and a working factory.
3. New sectors opened to investment. Foreign direct investment was opened up considerably in sectors including defence production, insurance, medical devices, construction and railway infrastructure, and the FDI rules for insurance and medical devices were eased, to encourage international investment and growth.
4. New infrastructure. The government concentrated on building industrial corridors and smart cities, using modern technology and high-speed communication to create world-class infrastructure. Three supporting steps went with this: innovation and research were helped by quicker registration systems and better infrastructure for intellectual property rights; the skills that industry needs were identified; and the workforce was developed to match them.

Allied national initiatives

Make in India does not stand alone. Skill India and Digital India run alongside it and are expected to work together with it for the economy. The Startup India scheme, a separate programme, aims to build a strong ecosystem for innovation and start-ups. It seeks to spread an entrepreneurial culture, to persuade educated youth, scientists and technologists that starting a business is a viable career, and to widen enterprise to under-represented groups such as women, socially and economically backward communities and under-represented regions. Its focus on new enterprises matches the entrepreneurship that the new-processes pillar of Make in India sets out to promote.

Support for small enterprises

The jobs objective of Make in India depends heavily on small firms. Micro, small and medium enterprises are the second largest employers in India after agriculture, they create more jobs per unit of capital than large industries, and the government treats their promotion as a powerful means of faster industrial growth and additional employment. The Central Government's measures for them therefore serve the same aim, even though they are schemes in their own right.

• Loans. Under the Pradhan Mantri MUDRA Yojana, launched on 8 April 2015, non-corporate, non-farm small and micro enterprises can borrow up to 10 lakh rupees (20 lakh rupees for borrowers who have taken and repaid an earlier loan in the Tarun category) from banks, regional rural banks, small finance banks, MFIs and NBFCs.
• Guarantees. The Credit Guarantee Fund Trust for Micro and Small Enterprises, set up jointly by the Ministry of MSME and SIDBI, gives guarantee cover for loans made to micro and small enterprises without collateral or third-party guarantee.
• Faster payment. Under section 15 of the MSMED Act, 2006, a buyer must pay a micro or small supplier by the date agreed in writing or, where there is no agreement, before the appointed day, and an agreed period can never exceed 45 days from the day of acceptance or deemed acceptance. MSME Samadhaan, the Ministry's delayed payment monitoring system, is where micro and small units can file such cases and follow their status.
• Government purchases. Section 11 of the MSMED Act allows the Central or a State Government to notify preference policies for buying goods and services produced by micro and small enterprises.

Conclusion

Make in India is a policy push to turn India into a base for manufacturing. The Central Government backed it with a change of attitude towards industry, simpler processes, wider room for foreign investment and new infrastructure with a trained workforce, and it runs alongside Skill India, Digital India, Startup India and the support schemes for small enterprises that carry much of the country's employment. Together these measures aim at the programme's twin goals of more jobs and better skills.