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Policy Monitoring

The Make in India initiative has significantly increased Foreign Direct Investment (FDI), particularly in manufacturing, attracting around $595 billion from 2014 to 2023. While it has created opportunities for women's employment and entrepreneurship, challenges such as low female labor force participation and gender bias remain. The initiative has the potential to generate millions of jobs and boost MSMEs, but it faces structural challenges like inadequate infrastructure and a skilled labor shortage that need to be addressed for sustainable growth.

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Anushka Dwivedi
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0% found this document useful (0 votes)
12 views12 pages

Policy Monitoring

The Make in India initiative has significantly increased Foreign Direct Investment (FDI), particularly in manufacturing, attracting around $595 billion from 2014 to 2023. While it has created opportunities for women's employment and entrepreneurship, challenges such as low female labor force participation and gender bias remain. The initiative has the potential to generate millions of jobs and boost MSMEs, but it faces structural challenges like inadequate infrastructure and a skilled labor shortage that need to be addressed for sustainable growth.

Uploaded by

Anushka Dwivedi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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What according to you could be a major achievement of the Make In India initiative since it’s launch?

A major achievement of the Make in India initiative since its launch has been the substantial
increase in Foreign Direct Investment (FDI), particularly in the manufacturing sector.

📈 Between 2014 and 2023, India attracted around $595 billion in FDI, with a 76% surge in
manufacturing FDI during the period 2021–2023 alone.

This growth reflects global investor confidence in India’s industrial potential, driven by policy
reforms, relaxed FDI norms, and improved ease of doing business. It has helped boost domestic
production capacity, promote technology transfer, and generate employment across key sectors.

Has the Make in India intiative turned out to be a significant measure in the Indian context ?

In gender terms, the Make in India initiative has had limited but growing significance in the
Indian context. While the program was not explicitly gender-focused, its impact on women's
participation in manufacturing and entrepreneurship has been both promising and
constrained.

✅ Positive Aspects: Emerging Opportunities for Women


1. Employment in Labour-Intensive Sectors

 Sectors promoted under Make in India—like textiles, food processing, and electronics
assembly—traditionally employ a large number of women.
 States like Tamil Nadu and Karnataka have seen increased female employment in
factories, especially in electronics manufacturing clusters.

2. Support for Women-Led MSMEs and Startups

 Women entrepreneurs have benefited from MSME schemes, credit programs, and
startup incentives aligned with Make in India.
 Schemes like MUDRA Yojana and the Stand-Up India initiative (closely tied to the
manufacturing push) have extended loans to many women-led enterprises.

3. Skill Development Programs

 Initiatives under Skill India have trained women in technical and industrial skills,
especially in rural and semi-urban areas.
 This has opened non-traditional career pathways for women in sectors like electronics
repair, machine operation, and product assembly.
⚠️Challenges and Gaps
1. Low Female Labor Force Participation

 India’s female labor force participation remains low (~25%), with limited increase
attributable to Make in India.
 Many formal manufacturing units still show gender imbalance, especially in higher-
paying or technical roles.

2. Gender Bias and Workplace Barriers

 Social norms, safety concerns, and lack of gender-sensitive infrastructure (transport,


childcare) restrict women’s entry into industrial workspaces.
 Leadership and ownership roles in manufacturing are still male-dominated.

3. Skilling Gaps

 While skilling programs exist, many are not gender-tailored, and uptake among
women—especially in high-tech or heavy industries—remains low.

🎯 Conclusion: A Measure with Untapped Gender Potential


Yes, Make in India has created new avenues for women, particularly in sectors like garments,
food processing, and light manufacturing. However, to make it truly significant in gender
terms, the initiative must:

 Mainstream gender in policy design


 Expand support for women entrepreneurs and workers
 Promote safe, inclusive, and flexible workplaces
 Ensure equal skilling and leadership opportunities

What do you think could be the implications of Make in India in terms of employment and Job
Creation in the economy ?

Positive Implications for Employment & Job Creation


1. Direct Job Creation in Manufacturing
 The initiative aims to increase manufacturing's share of GDP, which is more labor-
intensive than services or capital-intensive sectors like mining.
 Sectors like textiles, electronics, automobiles, and food processing are expected to
generate millions of direct jobs, particularly for semi-skilled and skilled labor.

✳️Estimates suggest Make in India supported ~3–5 crore (30–50 million) jobs indirectly and
directly (2014–2023).

2. Boost to MSMEs (Micro, Small, Medium Enterprises)

 MSMEs account for over 90% of industrial units and are a critical job engine.
 With initiatives like the Udyam portal and credit schemes, many MSMEs have
expanded under Make in India.
 Labour absorption in MSMEs is high, especially in rural and semi-urban areas.

3. Expansion of Ancillary Industries

 Large-scale investment in sectors like defence, electronics, and automobiles has led to
growth in auxiliary industries—logistics, packaging, maintenance, tooling—creating
indirect employment.

4. Skill Development Opportunities

 Schemes like Skill India and PMKVY are integrated with Make in India, training
workers in 21st-century manufacturing skills: CNC, robotics, mechatronics, etc.
 This builds a future-ready workforce while reducing unemployment.

5. Startups & Entrepreneurship

 Make in India is closely linked with Startup India, encouraging entrepreneurship in


manufacturing.
 Startups in green tech, medtech, agritech are opening up new forms of employment,
especially for the educated youth.

⚠️Challenges and Caveats


1. Jobless Growth Concerns

 Manufacturing in India has seen automation and tech-driven growth, leading to higher
output but not proportionate job creation (especially in capital-intensive sectors).

📉 For example, FDI in electronics increased sharply, but many plants rely on automated
assembly, limiting job gains.

2. Skilling Mismatch

 A large chunk of the workforce is informal and under-skilled. Even with Skill India,
many employers report skill mismatches in technical roles.

🧩 Only 4.7% of India's workforce had formal skill training in 2022 (NSDC)

3. Urban-Rural Employment Divide

 Most Make in India investments are concentrated in urban or industrial corridors,


which may not directly benefit rural or Tier-3/Tier-4 cities unless better connected.
 Could widen regional inequalities unless rural industrialization is also prioritized.

4. Displacement of Traditional Jobs

 Push toward formal manufacturing might displace informal artisanship, local crafts, or
legacy manufacturing unless policies integrate traditional sectors.

🧭 Conclusion: High Potential with Strategic Execution


Needed
If implemented inclusively and sustainably, Make in India can be a powerful employment
generator—especially in:

 Labour-intensive sectors (textiles, food, leather, toys)


 MSMEs and startups
 Rural manufacturing clusters

However, this requires:


 Deeper investments in skills, infrastructure, and ease of doing business
 A focus on inclusive, decentralized industrialization
 Alignment of education, vocational training, and industry needs

Policy Monitoring & Investment Facilitation in India


India has developed a robust digital and institutional infrastructure to monitor economic
reforms, track investments, and ensure seamless investor support. Here's a closer look at the
three key components:

📊 1. DPIIT Dashboard

(Department for Promotion of Industry and Internal Trade)

 Function:
A real-time digital platform designed to monitor the status of economic reforms, track
investment proposals, and assess project progress across states and sectors.
 Key Features:
o Transparent tracking of reform implementation at central and state levels.
o Regular updates on the status of infrastructure and industrial projects.
o Assists in identifying bottlenecks and areas needing policy attention.
 Impact (2014–2023):
o Over 27,000 investment proposals tracked.
o Total investments worth nearly $920 billion registered.
o Enables evidence-based policymaking by providing data analytics and
visualization.

2. Sectoral Nodal Ministries

(Ministries aligned with specific sectors of the economy)

 Function:
Each economic sector is assigned to a nodal ministry responsible for planning,
regulation, reform implementation, and progress reporting.
 Examples:
o Ministry of Defence (MoD) – Handles defence manufacturing and exports.
 Achievements: Defence exports increased from ₹1,940 crore in 2014–15
to ₹16,000+ crore in 2022–23, indicating a shift towards self-reliance
and Make in India.
o Ministry of Textiles (MoT) – Oversees textile industry performance,
modernization, and global competitiveness.
o Ministry of Electronics and IT (MeitY) – Reports on digital infrastructure
growth and investments in the tech sector.
 Role in Policy Monitoring:
o Provide sector-specific updates to DPIIT and PM Gati Shakti platforms.
o Coordinate with state governments and private investors to ensure reform
execution.

🌐 3. Invest India Portal

(India’s official investment promotion and facilitation agency)

 Function:
Serves as a single-window interface for domestic and foreign investors, offering support
at every stage—from interest to implementation.
 Key Services:
o Investor Handholding: Personalized guidance on policies, approvals, and
opportunities.
o Project Implementation Assistance: Helps investors navigate regulatory and
operational processes.
o Grievance Redressal: Tracks and resolves investor concerns through
coordination with ministries and states.
 Achievements:
o Over 170,000 investor queries resolved.
o Assisted investors from more than 100 countries, showcasing India’s global
outreach.
o Promotes India’s image as an investment destination through sectoral brochures,
global roadshows, and investor summits.

FDI Monitoring

(By RBI & DPIIT)

 Function:
Tracks Foreign Direct Investment inflows across sectors and regions to assess trends
and formulate responsive policies.
 How It Works:
o RBI (Reserve Bank of India): Records and reports actual FDI inflows through
authorized banks and channels.
o DPIIT: Analyzes FDI data to monitor sectoral allocations, regional distribution,
and policy effectiveness.
 Impact (Oct 2014 – March 2023):
o Total FDI inflow: $621 billion
o FDI diversified across sectors like services, IT, telecom, manufacturing, and
renewable energy.
o Helped India maintain its status as one of the top global investment
destinations.
 Benefits:
o Enables policy corrections based on sectoral underperformance.
o Supports Make in India, Startup India, and PLI (Production Linked
Incentive) schemes through focused investor targeting.

📊 2. Ease of Doing Business (EoDB) Reforms Tracker

 Function:
Digital platform that monitors progress on business reform action plans by both
central ministries and state governments.
 Key Parameters Tracked:
o Construction permits
o Starting a business
o Access to credit
o Enforcing contracts
o Registering property
o Labor regulation reforms
o Single-window clearance systems
 Results:
o India’s global Ease of Doing Business rank improved from 142 (2014) to 63
(2020) (as per World Bank).
o Recognized reforms included:
 GST implementation
 Insolvency & Bankruptcy Code (IBC)
 Digitization of approval processes
 Ongoing Use (post-WB EoDB ranking):
o Domestic benchmarking continues to motivate competitive federalism among
Indian states.

3. State-Level Monitoring

(Through State Investment Promotion Boards – SIPBs)

 Function:
Tracks state-wise project implementation, land allocation, and policy facilitation for
investors.
 Mechanisms Involved:
o State-specific dashboards (e.g., MahaParwana in Maharashtra, Investor
Facilitation Portal in Gujarat).
o Regular reporting to DPIIT and Invest India.
 Leading States:
o Maharashtra, Gujarat, Tamil Nadu have consistently led in:
 Timely project clearances
 Land and infrastructure provisioning
 Proactive industrial policies
 Why It Matters:
o States play a critical role in ground-level implementation of central policies.
o Helps identify best practices for replication across other states.

1. Foreign Direct Investment (FDI) Inflows

 Total FDI (2014–2023):


India received over $595 billion in FDI inflows, positioning itself among the world’s top
FDI destinations.
 Manufacturing FDI Surge (2021–2023):
o 76% rise in FDI equity inflow into the manufacturing sector, showcasing
investor confidence in India’s industrial potential.
o Key sectors: Electronics, automobiles, pharmaceuticals, textiles.
 Significance:
o FDI has catalyzed industrial expansion, technology transfer, and job creation.
o Reinforces India’s attractiveness under the “Make in India” initiative.

🏭 2. Manufacturing Growth

 GDP Contribution:
o Manufacturing share rose to ~17% of GDP in 2023, up from 14.5% in 2014.
o Indicates steady progress toward the government’s vision of becoming a global
manufacturing hub.
 Global Ranking:
o India ranks 5th globally in manufacturing output, driven by:
 Production-Linked Incentive (PLI) schemes
 Infrastructure support
 Industrial corridor development
 Key Sectors:
o Electronics, automotive, defence, aerospace, textiles, chemicals.

📈 3. Sectoral Growth Highlights

 Mobile Phone Exports (2023):


o Crossed $11.1 billion, making India a global assembly and export hub.
 Defence Production:
o Reached ₹1.26 lakh crore, supported by indigenization and private sector
participation.
 Automotive Sector:
o India became the 3rd-largest vehicle producer globally, with robust exports and
EV growth.

4. Infrastructure Development

 Industrial Corridors:
o 11 corridors planned (e.g., DMIC, Chennai-Bengaluru IC); 4 operational.
o Boosts multi-modal connectivity and logistics efficiency.
 National Infrastructure Pipeline (NIP):
o Over 9,000 projects tracked across energy, transport, urban, and digital sectors.
 Plug-and-Play Parks:
o Ready-built industrial zones with pre-approved infrastructure in major states
like Gujarat, Tamil Nadu, Uttar Pradesh.
o Reduces setup time for investors.

🏢 5. Ease of Doing Business (EoDB)

 Global Ranking:
o Jumped from 142 (2014) to 63 (2020) in World Bank’s EoDB rankings.
 Reforms Undertaken:
o Digital business approvals, self-certification systems, single-window clearances.
o 20+ states implemented business reform action plans tracked via the EoDB
Reforms Tracker.
 Impact:
o Greater investor confidence, reduced compliance burdens, and faster setup
timelines for enterprises.

6. Employment & Startups

 Startup Ecosystem:
o Over 100,000 recognized startups (as of 2023), making India the 3rd-largest
startup ecosystem globally.
 Job Creation:
o Make in India is estimated to have indirectly supported 3–5 crore jobs across
sectors.
 MSME Growth:
o Millions of MSMEs registered via the Udyam portal, gaining access to credit,
insurance, and procurement support.

🧩 Conclusion: Synergistic Growth


All these initiatives—FDI policy liberalization, infrastructure development, industrial corridor
creation, EoDB reforms, and startup support—are interlinked and contribute to:

 A resilient manufacturing base


 A future-ready workforce
 A digitally empowered investment climate

Challenges Facing 'Make in India': A Critical Assessment


While Make in India has brought attention and investment to Indian manufacturing, persistent
structural challenges have slowed progress toward its ambitious goals—particularly the aim to
raise manufacturing’s GDP share to 25%.

🏭 1. Low Manufacturing Contribution to GDP

 Current Status:
o Manufacturing accounted for just 13.3% of GDP in 2022, far below the 25%
target envisioned in the National Manufacturing Policy and Make in India
roadmap.
 Implications:
o Limited transformation from agriculture/services to industry.
o Manufacturing is not yet a core engine of employment or value-addition.
o Missed opportunities in global supply chain integration.
 Underlying Causes:
o Low technology adoption.
o Inconsistent state-level policy support.
o Land and labor constraints in industrial clusters.

2. Inadequate Infrastructure & High Logistics Costs

 Global Rank (2023):


o India placed 40th in the World Bank’s Logistics Performance Index (LPI).
 Logistics Costs:
o India spends 13–14% of GDP on logistics—significantly higher than the 8–9%
in advanced economies.
 Challenges:
o Fragmented transport networks.
o Inefficient warehousing and intermodal connectivity.
o Slow infrastructure execution despite industrial corridor projects.
 Impact:
o Reduces competitiveness of Indian exports.
o Discourages MNCs from setting up manufacturing hubs.

3. Skilled Labor Shortage

 NSDC Data (2022):


o Only 4.7% of India’s workforce received formal skill training.
 Consequences:
o Wide skill gap in precision manufacturing, robotics, electronics, etc.
o Mismatch between education output and industry demand.
o Companies face higher training costs and lower productivity.
 Skill India & PMKVY Efforts:
o While well-intended, they have had limited industry integration and
inconsistent quality control.

4. Complex Regulatory Environment

 EoDB Ranking (2020):


o India ranked 63rd globally, a marked improvement—but challenges persist.
 Regulatory Overload:
o Over 1,500 central and state laws govern industrial activity.
o Businesses face:
 Multiple clearances, often duplicative.
 Unpredictable tax regimes.
 Onerous compliance paperwork.
 Result:
o Startups and MSMEs struggle to scale.
o Foreign investors encounter red tape, deterring long-term manufacturing plans.

🧪 5. Low Investment in Research & Development (R&D)

 R&D Spending:
o India’s gross expenditure on R&D (GERD) is just 0.64% of GDP (2021).
o Far behind:
 China (2.4%)
 South Korea (4.8%)
 USA (~3.5%)
 Concerns:
o Weak innovation ecosystem.
o Limited private sector participation in R&D.
o Inadequate university-industry collaboration.
 Effect:
o India lags in developing cutting-edge manufacturing (e.g., semiconductors,
robotics).
o Dependence on foreign tech and licensing increases.

🌐 6. Dependence on Imports

 Import Bill (FY 2022–23):


o India imported goods worth $710 billion.
 Key Imported Items:
o Electronics
o Machinery and components
o Semiconductor parts
o High-end capital goods
 Concerns:
o Reflects domestic manufacturing limitations.
o Trade imbalance.
o Vulnerability to global supply shocks (as seen during COVID-19).
 Despite PLI Schemes & Tariff Adjustments:
o India has yet to build deep supply chains in high-tech sectors.
o

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