ot many would be aware that imported firecrackers are banned in India. This year, around Diwali, the Commerce and Industry Ministry put out an advisory that such crackers are banned and possession and sale is illegal, and any such activity should be notified to the nearest police station.In recent years, Chinese firecrackers have flooded the Indian market. While there was no mention of the country of origin in the central government advisory, the message was obvious. The advisory mentioned that the Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA) has also informed that illegal fireworks of foreign origin have penetrated into the country in large quantities to be sold through retail outlets. "In view of the above, general public/stakeholders are requested that information about possession and/or sale of such fireworks may be reported to the nearest police station or the district authorities for suitable action," it said.
The advisory was put out twice and there are reports that more shops were selling indigenous crackers. With Prime Minister Narendra Modi "Make in India" message resonating on social media, more consumers were asking for homemade Diwali products. In line with the government's focus on job creation by boosting manufacturing, Modi had launched the campaign in the presence of over 600 global and domestic CEOs on September 25. Like the Pradhan Mantri Jan Dhan Yojana and several other schemes of the Modi government, the campaign was launched on a massive scale across several cities and in embassies. It seeks to promote manufacturing of goods within India rather than importing them.
The move is aimed at generating huge employment opportunities in the country, besides boosting trade and economic growth. "I call upon the world and call upon the Indians spread world over that if we have to provide more and more employment to the youth, we will have to promote the manufacturing sector. If we have to develop a balance between imports and exports, we will have to strengthen this sector. If we have to put in use the education, the capability of the youth, we will have to go for the manufacturing sector," Modi had said in his Independence Day address.
Modi had also called for zero-defect products with with zero-effect on environment. "I tell the world, 'Make in India'. Sell anywhere but manufacture here. We have the skill and talent for it," he had said. Modi had said the Indian enterprise and youth must come together to think of ways by which the country did not have to import goods, but export to the world. At the same time, he said manufacturing industry must also be responsible. "Let us think about zero defect—our products are not defective and our products have zero effect on environment," he stated.
Getting manufacturing right
A Ficci document said the 'Make in India' campaign can transform Indian manufacturing, with its share in GDP languishing at 15-16 per cent for several years. Given the need to create a million non-farm jobs every month, manufacturing would have to grow at 12-14 per cent annually.
It states that India is unarguably an attractive investment destination given its rich demographics that feed into the intrinsic demand and supply elements of businesses. The potential, however, has remained mostly untapped for want of a truly enabling environment required for businesses to flourish.
The focus must be on improving business environment through the ease of doing business and an encouraging fiscal framework, enabling the manufacturing setup by providing a conducive eco-system that supports factor advantage, nurtures innovation and strengthens inter-linkages with other industries and institutions and attracting greater capital through further liberalisation of foreign direct investment in key sectors.
The government's vision on manufacturing seeks an increase in the manufacturing sector growth to 12-14 per cent per annum over the medium term and an increase in the share of manufacturing in the country's GDP from 16 per cent to 25 per cent by 2022.
Growth target
The plan is to create 100 million additional jobs by 2022 in the manufacturing sector with the creation of appropriate skill sets among rural migrants and the urban poor for inclusive growth.
In addition, the target is an increase in domestic value addition and technological depth in manufacturing, enhancing the global competitiveness of the Indian manufacturing sector and ensuring
sustainability of growth, particularly with regard to environment.
The government has taken several measures to enhance ease of doing business by making approvals simpler, creating portals and single-window clearances online, easing FDI in several sectors, labour reforms to enhance manufacturing in India. The Prime Minister has got commitments for investments in India to the tune of $20-35 billion each from Japan, China and the US in his bilateral visits and meetings.
With the growth slowdown in the last few years, the manufacturing sector has taken the biggest hit. Several projects have been stuck due to many reasons and the new government is trying to revive them. The coal ordinance is targeted at ending the uncertainty and reviving the power, steel and cement sectors and increasing coal availability.
Setting up factories and plants requires a lot of factors to come together from land to power. It is the most stable form of investment which creates blue-collar jobs and enhances economic activity in ancillary industries also.
India has many strengths in manufacturing which need to be leveraged to increase the footprint on the global stage. It will also benefit from favourable demographic dividends for the next two-three decades with sustained availability of quality workforce. The cost of manpower is relatively low as compared to other countries.
Promising easy and effective governance to investors and companies which would help them to invest capital and enhance the ease of doing business, the Prime Minister said the gloom in the business community had lifted in the last few months. He had felt a mood of gloom among the business community in the last few years due to lack of clarity on policy issues. He said he had heard businessmen say they would leave India and set up business elsewhere. No businessman should feel a compulsion to leave the country under any circumstances, he said.
Modi, however, indicated that instead of providing sops, the government would provide a conducive environment to industry to invest and grow in India. "Incentives can't attract business. We have to create development and growth-oriented environment," he said.
The Prime Minister also unveiled the "Make in India" logo and launched a website which would address investor queries in addition to 25 sectoral brochures covering diverse industries. India Inc has strongly backed Modi's campaign, with many industry leaders saying boosting the manufacturing sector would take India to a high growth path. "Our aspirations on the global manufacturing arena will be fulfilled if we address certain challenges on priority," Tata group chairman Cyrus Mistry had said, addressing the gathering at the campaign launch.
"These factors will include the build-up of critical infrastructure across the country supported by stable policies, transparent and competitive tax and duty structure, efficient and time-bound administration through the use of e-governance, cost effective and reliable energy coupled with logistics, critical for the competitiveness of industry," he added. Pledging his support to the initiative, Reliance Industries chairman Mukesh Ambani said in order to succeed in this campaign, it was important to be open to capital and expertise from all over the globe, and implementation of GST will make India one market and strengthen the "Make in India" programme.
Ambani, announcing Reliance Industries would create 1.25 lakh jobs in 12-15 months, said it was also important for villages to be a part of the growth story.
Tata group chairman Cyrus Mistry with Reliance Industries chairman Mukesh Ambani at the CEOs’ meet.
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The positives
 Demographic dividends
Cost of manpower is relatively low
Quality workforce
Strong consumerism in domestic market
Technical, engineering capabilities
Top-notch scientific, technical institutes
Well-regulated, stable financial markets open to foreign investors The hindrance
Stringent labour laws that restrict adjustments to business cycles
Skill mismatch
Non-commensurate employment options Vision 2020 for India
Expected to rank among the world's top three growth economies
Projected as top three manufacturing
destinations
the Progress so far
Since the new government took over, steps have been taken to revitalise the industrial sector in general and manufacturing sector in particular.
The railway has been opened to FDI. |
e-Biz website: The process of applying for Industrial License and Industrial Entrepreneur Memorandum has been made online on the e-Biz website. The validity of industrial license has been extended to three years. The portal for "Make in India" would soon provide a 24x7 online, real-time platform for all central regulatory clearances. In partnership with state governments, state-level clearances will also be brought on this portal. Amending laws:
With a view to providing flexibility in working hours and increased intake of apprentices for on-the-job training, the government has decided to amend labour laws. An advisory has been sent to all departments and state governments to simplify and rationalise regulatory environment, including online filing of all returns in a unified form and no inspection without the approval of the head of the department. FDI cap:
The FDI policy has been liberalised. The FDI cap in the defence sector has been raised from 26 per cent to 49 per cent; 100 per cent FDI under automatic route has been permitted in construction, operation and maintenance in specified rail infrastructure projects; and FDI norms in the construction development sector are being eased.
Skill development at the core. |
In the pipeline
Dedicated cell: A cell will be set up to substantially revamp the query handling process. While exhaustive FAQ on the portal will help the investor in an interactive way, human interface has been mandated to reply latest in 48 to 72 hours. Nodal officers have been identified in all key ministries. Facilitation centre:
A proactive approach will be deployed to track visitors for their geographical location, interest and real time user behaviour. Subsequent visits will be customised for the visitor based on the information collected. Visitors registered on the website or raising queries will be followed up with relevant information and newsletter. Investor facilitation cell will provide assistance to investors from the time of arrival to time of departure concerning all clearances. Potential investment:
The campaign will also target top companies in identified countries and sectors with potential to attract investment. These include 25 sectors like automobiles, chemicals, IT, pharmaceuticals, textiles, ports, aviation, leather, tourism and hospitality, wellness and railways that will give details of growth drivers, investment opportunities, FDI and sector policy and related agencies. Improved infrastructure:
The government is working on improving the physical infrastructure. Development of dedicated freight corridors and investment in improving ports and airports are under way. These corridors would house industrial agglomerations along with smart cities. The private sector would be playing a significant role in these developmental works. Human capital:
The government's effort is to equip the working age population with the right kind of skills so that the manufacturing sector finds them employable. The government has planned a department of skill development and entrepreneurship.
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