"Make in India" slowly picking up momentum, yielding results
Modi's much-touted "Make in India" initiative is reportedly yielding positive results. An analysis based on the extent of industrial development, foreign investments and exports, point out that there has been a marked increase in industrial growth on the advent of this program. It is still early to predict if it can be sustained, but it's a good start. Here's all about it.
The Mint analysis cited that the value of industrial units in 2016 was 29% higher than that of the previous year, according to their observations from the Department of Industrial Policy and Promotion (DIPP) data. Moreover, DIPP data mining also showed that Maharashtra, Karnataka and Madhya Pradesh have been the biggest beneficiaries with the major chunk of new projects landing up in their kitty.
Foreign Direct Investment inflows also picked up pace and showed a rise of 18% amounting to $46.4 billion in 2016. Telecom and insurance remained FDI favorites, overall composition towards the manufacturing sector saw an annual rise of 38% in inflows, however, defense and railways despite liberalization witnessed insignificant investment as pointed out by Citibank economists Samiran Chakraborty and Anurag Jha.
The recent rallying of merchandise exports might have been a reason for global cyclical recovery, but was helpful in bolstering the 'Make in India' brand. Capital goods (engineering goods), textiles and commodities (iron-ore) led the recent upswing of exports but this is temporary and will fizzle out soon; Nomura analysts believe that there are "risks of a more pronounced export slowdown in 2018."
The present task at hand for Modi and his 'Make in India' is to generate more jobs in sectors, which are labor-intensive and churn out more products for the world, while China is rejigging its economy. There's help at hand, as DIPP data indicates that textiles and electrical sectors, which are comparatively labor-intensive in nature are the biggest gainers of the newly slated projects.
Elattuvalapil Sreedharan, endearingly known as the "Metro Man" for contributions in metro rail system of India, has asked Modi to make metro a 'Make in India' project in order to keep the costs under check. In the letter to the Prime Minister, Sreedharan wrote: "Unless indigenisation is taken up seriously and vigorously it will not be possible to reduce the cost of Metro projects."