Will Narendra Modi’s “ Make in India“ work?

Prime Minister had launched yet one more campaign on sept. 25, 2014, titled

‘Make in India “. The  objective is to encourage Indian industry and entrepreneurs to produce in India. Right now, manufacturing sector contributes only 15% of GDP. The objective is to raise it to 25%.

If manufacturing contributes 25% of our GDP, then obviously there will be the benefits of more employment and also higher incomes and reduced import bill. We may even reduce our gap with the Chinese which is biggest trade partner. The benefits are many. But can we achieve it ?


Hurdles to achieving the target of 25% contribution by manufacturing to GDP.

a. The existing infra-structure is not enough or encouraging to have vastly expanded production. Unless the infra-structure develops, it will be difficult to  make India a “production hub “.

b. There is a severe power shortage in the country. How can we have more production, when the main ingredient power is absent? Unless we get to be a power surplus or power-available country, it will be difficult to see India turning into a manufacturing hub.

c. There is also a need to reform the courts and judiciary. Our courts take decades to give decisions and the process s is very expensive and time-consuming. We find that courts even go back 20 years to cancel permits and licenses. Industry and business wants certainty. This is absent in India.

d. Industry wants new labour legislation. This is not forth-coming. Unless there are changes in labor laws, industry will not come forth .

e. The World Bank has recently listed India as one  of the  most difficult countries to do business in. This rating hasnot changed in the last decade. Every governmentsays that itwill do something. Btu nothing hasbeendone. The Modigovernmenthas to reflect deeply on how best it can India a place where it is relatively easy to do business.

The objective of making India a manufacturing hub is laudable. We have ll crore Indians who are educated and un-employed. Only industry an find them  jobs. Major reforms are needed before  we can increase the production base in India.

By Pullarao Pentapati


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