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A Study of Impact of Make in India Campaign on the Indian Economy
Article · February 2020
DOI: 10.14445/23939125/IJEMS-V7I2P114
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SSRG International Journal of Economics and Management Studies (SSRG-IJEMS) – Volume 7 Issue 2 – Feb 2020
A Study of Impact of Make in India Campaign
on the Indian Economy
Dr. Nishant Ravindra Ghuge
Assistant Professor, KCES’s Institute of Management and Research, Jalgaon
Madhukar” 128/1 Adarsh Nagar, Jalgaon, Maharashtra, India- 425001
Abstract II. OBJECTIVES OF THE STUDY
Make in India is the NDA government's flagship 1. To understand the Make in India campaign of
program envisioned to improve the domestic Government of India
manufacturing industry and appeal foreign investors
to invest into the Indian economy. Manufacturing 2. To Identify the New Initiatives carried out under
plays a vital role in India. But there is need of sound Make in India campaign
policies and facilities for land procurement, labour
laws, power tariffs, transport, and logistics. 3. To study the impact of Make in India on GDP of
Government has shown intent to ease the processes the country
but the actual implementation is very slow. For the
4. To study the impact of Make in India on the FDI
success of Make in India program, mere willingness
to spend on infrastructure and attracting FDIs will Inflows in India
not serve. The government needs to work on
III. REVIEW OF LITERATURE
implementation. It should strive for better
implementation of the decided policies. The problems (Bhatia & Agrawal, 2018) States that the government
on the grassroot level needs to be understood and has been successful to a great degree in terms of
addressed. positioning India as a international manufacturing
Keywords:- Make in India, Foreign direct hub not only on the basis of slogans and propaganda,
Investments, Indian Economy but on the basis of the small steps taken in every
sphere of the economy. These small actions, from
I. INTRODUCTION reducing the export formalities to setting up an
Investor Facilitation Cell, have been the real catalysts
Make in India is the NDA government's flagship
behind this campaign and are at its core. It is also
programenvisioned to improve the domestic
evident that the campaign has great opportunities for
manufacturing industry and appeal foreign investors
India‟s future and hence must be pursued with equal
to invest into the Indian economy. The Indian Prime
vigour in the coming years.
Minister, Mr. Narendra Modi in his Independence
day address on 15 August 2014cited the key phrase (Sahoo, 2018) The measures taken by the
over a month later launched the Make in India Government are directed to open new sectors for
campaign in September 2014 with an intent of foreign direct investment, increase the sectoral limit
reviving manufacturing businesses and highlighting of existing sectors and simplifying other conditions
key sectors in India amongstrising concerns that most of the FDI policy. FDI policy reforms are meant to
business persons are moving out of the nation due to provide ease of doing business and accelerate the
its poor ranking in ease of doing business ratings. pace of foreign investment in the country. Over all
scenario of make in India and FDI was a positive
The Current contribution of Manufacturing Sector is
summon to prospective investors from all over the
just over 15% to the national GDP. The goal of the
world. It represents a wide-ranging refurbish of
Make in India campaign is to grow the contribution
processes and policies. Earlier, Indian Government
from manufacturing sector to 25% as seen with other
was working with a mindset of an issuing authority,
emerging nations of Asia. In this process, the
but now with the launch of Make in India, it has
government expects to create jobs, attract more
started working as a Business Partner
foreign direct investments, and transform India into a
manufacturing hub preferred around the world. (Aneja, 2016)has stated that make in India is an
ambitious project, but it is the one that India urgently
needs to kick start and sustain its growth momentum.
With relentless policies towards this end, it is
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SSRG International Journal of Economics and Management Studies (SSRG-IJEMS) – Volume 7 Issue 2 – Feb 2020
possible to make India the powerhouse of B. New Infrastructure:-
manufacturing sector in the world. He concluded that
the concept of Make in India will certainly going to New transport and Digital Infrastructure is developed
lift up the Indian economy and will aid in meeting the to support the economic development and improve
major challenges of poverty, unemployment, low per the quality of life of citizens. Following is the list of
capita income and help in sharing the burden of new infrastructure development projects being
government carried out
IV. RESEARCH METHODOLOGY Industrial Corridors and 21 new nodal Industrial
Cities to be developed:
The Study is mainly based on secondary data. The
data for this study has been collected from sources Doubling of Network of Roads by 2020 and
like research papers published in journals, Construction of 15,000 km new roads by 2017 is
government websites and other authenticated
targeted under various projects
websites.
Railway projects such as Setting up of New
V. NEW INITIATIVES UNDER MAKE IN
INDIA Railway Stations, Mordernisation of Rolling
stock, High Speed Railways, Port Mine
The following new initiatives were carried out under
connectivity etc. have been initiated for
make in India:-
Modernising and better connectivity of Indian
Railways.
New Eastern Dedicated Freight Corridor of 1840 km
New Process New Sectors
Infrastructure length and Western Dedicated Freight Corridor
of 1504 km length is under construction as well
as many projects are under planning stage.
Sagar Mala project is started by the Govt. of
A. New Process:- India to modernize India's Ports and Inland
NewImproved business processes and procedures waterways so that port-led development can be
were developed to facilitate the ease of doing augmented and coastlines can be developed to
business in India and create confidence among contribute in India's growth, providing a project
entrepreneurs as a result of which India moved up 12 outlay of $10 Bn
places in the World Bank‟s Doing Business ranking
2016 released in October, 2015. Some of the key The Smart Cities Mission having a project outlay
highlights of these procedures were of $7.69 Bn is progressing, with Special Purpose
Vehicles for 19 cities already set up.
Incorporation of a company reduced to 1 day
instead of 10 days Aviation industry with target of becoming
Power connection provided within a mandated 3rd largest by 2030 and to cater international and
time frame of 15 days instead of 180 days domestic traffic.
No. of documents for exports and imports 3rd largest tech driven Start-up ecosystem
reduced from 11 to 3
globally and Tech Startups in India are expected
Validity of industrial license extended to 7 years to reach 11,500 in 2020 from 4,300 in 2015
from 3 years
“Start-up India” initiative was launched aiming
Bankruptcy Code 2015 – New bankruptcy law,
providing for simple and time-bound insolvency at fostering entrepreneurship and promoting
process to be operational by 2017 innovation by creating an ecosystem that is
Goods and Services Tax – Single tax framework conducive for growth of Start-ups.
by April, 2017
Permanent Residency Status for foreign
investors for 10 years
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SSRG International Journal of Economics and Management Studies (SSRG-IJEMS) – Volume 7 Issue 2 – Feb 2020
C. New Sectors:- olive oil tree plantations has opened for 100%
The Make in India initiative targeted 25 economic foreign investment under automatic route.
sectors for job creation and skill development, and 9. Telecom: FDI up to 100% with 49% under
aimed "to transform India into a global design and automatic route
manufacturing hub".
10. Insurance & Pension: FDI Policy has been
Automobile Automobile Aviation Biotechnology reviewed to increase the sectoral cap of foreign
Components
Chemicals Constructio Defence Electrical investment from 26% to 49% with foreign
n Manufacturin Machinery investment up to 26% to be under automatic
g
Electronic Food IT and BPM Leather route.
Systems Processing
Media and Mining Oil and Gas Pharmaceutical
11. Medical Devices: 100% FDI under automatic
Entertainmen s route for manufacturing of medical devices has
t
Ports and Railways Renewable Roads and been permitted.
Shipping Energy Highways 12. E-Commerce: 100% FDI in B2B e-commerce,
Space Textile and Thermal Tourism and
Garments Power Hospitality Single brand retail trading entity permitted for
Wellness
B2C e-commerce and e-commerce food retailing
13. Retail: 100% FDI and 49% under automatic
FDI Reforms were carried out in the following route is allowed. In case of „state-of-art‟ and
sectors:-
„cutting-edge technology‟ sourcing norms can be
relaxed subject to Government approval. 100%
1. Defence: Up to 49% under automatic route and
FDI is now permitted under automatic route in
above 49% through Government route
Duty Free Shops located and operated in the
2. Civil Aviation: 100% FDI under automatic route in
Customs bonded areas.
Greenfield Projects and 74% FDI in Brownfield
Projects under automatic route beyond 74% for
VI. GDP GROWTH RATE OF INDIA
Brownfield Projects is under government route.
3. Broadcasting: New sectoral caps and entry routes
are as under: GDP Growth rate (%)
o Broadcasting Carriage Services & down-linking of
news channels: 100% FDI
o Cable Networks: 100% FDI and in News channels:
49% FDI 8 8.2
7.4 7.2 7.1
4. Banking: FDI up to 74% with 49% under automatic 6.12
route rest through government route
5. Railways: 100% FDI under automatic route
permitted in construction, operation and maintenance
of Rail Infrastructure projects 2014 2015 2016 2017 2018 2019*
6. Construction: 100% FDI through automatic route
Source:-data.gov.in
and Removal of minimum floor area & minimum
capital requirement * The data for the year 2019 is estimated data
7. Pharmaceuticals: The extant FDI policy on
The GDP Growth rate doesn‟t show any considerable
pharmaceutical sector provides for 100% FDI under increase after the launching Make in India Program
automatic route in Greenfield pharma and FDI up to the year 2014. However it is very short span which
74% under automatic route and 100% under has passed after the campaign make in India has been
started and it will take few more years to show the
government approval in Brownfield pharma.
positive impact on the GDP of the nation.
8. Plantation: Certain plantation activities namely;
coffee, rubber, cardamom, palm oil tree and
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SSRG International Journal of Economics and Management Studies (SSRG-IJEMS) – Volume 7 Issue 2 – Feb 2020
VII. FDI INFLOWS OF INDIA Business ranking 2016 released in October,
2015.
5) Technology Upgradation:-
Annual FDI Inflows(US $ billion) India being an underdeveloped country
obviously lack various latest mechanization,
which, is a big hurdle in the path to development
43.5 44.9 of the nation. Hence, with the myriad of
40 countries coming forth by the make In India
30.9 crusade, India will be given the opportunity to
24.3 make use of the latest technology these countries
bring along. Not only will India benefit from the
knowledge and use of the technology but also,
2013-14 2014-15 2015-16 2016-17 2017-18 the concerned nations will be provided with a
skilled manpower
Source:-dipp.gov.in
The FDI Inflows shows that there is considerable IX. CHALLENGES FOR MAKE IN INDIA
increase in the amount of FDI Inflow after launching Manufacturing plays a vital role in India. But there is
of the Make in India Program. There are many need of sound policies and facilities for land
factors responsible for the increase in FDI Inflows. procurement, labour laws, power tariffs, transport,
However Make in India Program has made an and logistics. Government has shown intent to ease
positive impact on the FDI Inflows. the processes but the actual implementation is very
slow. The Infrastructure development in India is
VIII. BENEFITS OF MAKE IN INDIA extremely slow which halts the economic
development. Thus, Until this facilities are developed
1) Create Employment:- to cater the needs of the multinational companies, the
One of the main objectives of Make in India effect of make in India cannot be seen practically.
campaign is to provide job opportunities to as
many citizens of India as possible. It has targeted X. CONCLUSION
the youth of the country as its prime recipient.
The Make in India campaign launched by the
The investments in the targeted sectors, i.e.
government of India shows a positive result.
telecommunications, pharmaceuticals, tourism
However there are certain challenges for make in
etc. will encourage the Indian youth to come
India to become completely successful and the
forward with their innovative concepts.
success to get reflected in the nation‟s GDP. A
2) Increase GDP:-
Nation can develop only if it meets the domestic
Due to the manufacturing of products in India,
demand of goods and services is catered on its own
economic growth is unavoidable, which will not
and the country exports on considerable amount.
only boost the trade sector but also will increase
Manufacturing plays a very important and vital role
the GDP of Indian economy as with the setting
for this purpose. But, for that sound policies and
up of new factories Various sectors such as
facilities for land procurement, labour laws, power
exportation, architecture, textiles,
tariffs, transport, and logistics etc are the primary
telecommunications etc. are likely to flourish
requirements. The implementation of GST system
inevitably, strengthening the Indian economy
and demonetisation created problems for the small
which is already the seventh largest in the world.
scale sector. After the turbulence, the value of rupee
3) FDI Inflow and Strengthen Rupee:-
decreased. It ultimately reduced the value of our
The advent of the manufacturing industries
exports. Government in between also levied long
would automatically convert India into a hub for
term capital gains tax on investment in india which
the manufacture of various commercial products;
was earlier exempt. All these issues reduce the
as a result, there would be a grand collection of
confidence of private players, and there is a lack of
the FDI, which, in turn, would strengthen the
investments. For the success of Make in India
rupee against the American dollar.
program, mere willingness to spend on infrastructure
4) Foster Ease of Doing Business:-
and attracting FDIs will not serve. The government
NewImproved business processes and
needs to work on implementation. It should strive for
procedures were developed to facilitate the ease
better implementation of the decided policies. The
of doing business in India and create confidence
problems on the grassroot level needs to be
among entrepreneurs as a result of which India
understood and addressed.
moved up 12 places in the World Bank‟s Doing
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SSRG International Journal of Economics and Management Studies (SSRG-IJEMS) – Volume 7 Issue 2 – Feb 2020
XI. REFERENCES
[1] (2019, december 20). Retrieved from
businessalligators.com:
https://www.businessalligators.com/advantages-
disadvantages-make-india/
[2] (2019, December 20). Retrieved from Department for
promotion of Industry and Internal trade:
https://dipp.gov.in/publications/fdi-statistics
[3] (2019, december 22). Retrieved from Data.gov.in:
https://data.gov.in/keywords/gdp
[4] Aneja, D. P. (2016). Make in India : New Paradigm for
Socio-Economic. Paripex- Indian Journal of Research,
295-297.
[5] Bhatia, R., & Agrawal, S. (2018). Make in India: A
quantitative approach. International Journal of Applied
Research, 152-156.
[6] Gauba, R., Nandita, & dhingra, R. (2018). Make in
India-An Initiative to Change the Economic Landscape
of the country. Amity Journal of Economics, 88-104.
[7] Kamal, N. (2017). Make in India : A Roadmap for
Sustainable Growth. International Journal of Business
Administration and Management, 83-97.
[8] Make in India. (2019, december 15). Retrieved from
Make in India.com: http://www.makeinindia.com/
[9] Maps of India. (2019, December 20). Retrieved from
Maps of india:
https://www.mapsofindia.com/government-of-
india/make-in-india.html
[10] Mir, I. A. (2017). Strategic Importance of „Make in
India‟ Campaign to Empower Indian Economy .
Imperial Journal of Interdisciplinary Research, 2454-
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[11] Sahoo, B. B. (2018). Make in India: Impact on Indian
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Business and Management, 01-06.
ISSN: 2393 - 9125 www.internationaljournalssrg.org Page 96
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