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India’s Manufacturing Sector Policy Framework

India’s Manufacturing Sector Policy Framework

CHAPTER 1:

INTRODUCTION

On August 15, 2014, Prime Minister NarendraModi, in his maiden Independence Day speech, reached out to companies around the world to ‘Come, Make in India’. He further said ‘Sell in any country of the world but manufacture here. We have got skill, talent, discipline, and determination to do something’.

The key features under ‘Make in India’ –

  • Cut red Tapism
  • Spurforeign INVESTMENT
  • Better skill up gradation
  • Zero-defect products with Zero- (negative) effect on environment
  • Innovation
  • Enhance skill development
  • Protect intellectual property
  • Built best in class infrastructure
  • According to MrNarendraModi, we Indians should take FDI as ‘ First Develop India’ and the global investors should consider it as ‘Foreign Direct Investment’
  • Making India a manufacturing hub

The Government has identified 25 key sectors in which the country has the potential of becoming world leader some of them these include: .chemicals, automobiles, pharmaceuticals, textiles, ports, leather hospitality mining, bio-technology etc etc, .

The new government has taken up certain initiatives to brace the manufacturing sector in particular, some of which are-

  • Applying for Industrial License and Industrial Entrepreneur Memorandum has been made online – ‘e-Biz website’
  • De-Licensing has been done on number of Defence items
  • Industrial license validity has been extended to three years
  • The Government has now decided to amend a number of labour laws in order to provide flexibility in working hours and increase intake of apprentices for job training
  • To simplify the regulatory environment an Advisory has been sent to all departmentswhich includes-

filing of all returns in a unified form online

  • No inspection will take place without the approval of the Head of the Department

 

CHAPTER 2:

POLICIES TAKEN UP BY THE GOVERNMENT

‘Make in India’ has focused on the development of 25 sectors out of which some are as follows:-

  • AUTOMOBILES:
  • 100% FDI is allowed through automatic route subject to all the applicable laws and regulations.
  • Imports are exempted from licensing and approvals.
  • Offering rebate on R&D expenditure in order to encourage R&D.
  • INFORMATION TECHNOLOGY:

To make business easier new measures are helping reduce complexity, accelerate speed and transperancy

  • Validity of Industrial license has been extended up to three years
  • Maintenance of the registers by the business has to be replaced with a single electronic register
  • LEATHER:

Major emphasis has been given to skill development through Indian Leather Development Program

  • Training has been imparted to 51,216 youth in the last 100 days
  • Further planning has been done to train 1,44,000 youth per annum
  • For augmentation of training infrastructure, funds have been released for establishment of 4 new branches of Footwear Design and Development Institute in Hyderabad, Patna, Punjab and Gujarat.
  • CONSTRUCTION:

Live Project taken up by the Government:

DELHI-MUMBAI INDUSTRIAL CORRIDOR (DMIC)

The objective of this project is to increase the share in the GDP of the manufacturing sector of our country and to create smart. The plan is to develop cities and residential townships along the Dedicated Railway Freight Corridor (DFC). The aim of the program is to create a world-class infrastructure, good convenient public transport, power management and an efficient water management system..

Around Twenty four manufacturing cities are engaged in the project. In the first phase of the plan, seven cities have been developed each in the states of Uttar Pradesh, Madhya Pradesh and Gujarat, Haryana, Rajasthan, and two in Maharashtra. These cities will provide vast opportunities for the investors internationally and domestically. The initial phase will be completed by 2019.New DMIC Cities will help meet pressure of urbanization and will take India towards economic growth in the next 20 -30 years.

The project aims at double employment potential, triple industrial output and exports in the next seven to nine years.

KEY SUSTAINABLE DEVELOPMENT CONCEPTS UNDER THE PROJECT-

  • Recycling and reuse of solid waste and water.
  • Use of renewable leading to energy sufficiency
  • Conservation of sensitive natural environment .
  • Transformation of existing villages into smart cities

CHAPTER 3:

SCHEME ANALYSIS AND RECOMMENDATION

HURDLES ARISING IN THE WAY OF THE SCHEME

The term ‘extremely progressive’ for the Make In India campaign would not only help in making india a manufacturing hub but also make economic growth more inclusive. But for the campaign to succeed, hurdles like environmental clearances, infrastructure bottlenecks and unfriendly tax regimes are important to be removed in order to create a clear leveled field for the manufacturing in the country. other than these certain other points like:

  • Energy shortages
  • Skilled resources
  • Trained workers
  • Skilled professionals
  • Land problems
  • Ambiguous tax laws
  • Excessively complicated labor laws

Have kept a large scale of private investors away from investing. The lack of cooperation between the state and the federal governments is another reason as to why investors have lost faith.

A lot of suppliers as well as auto manufacturers face problems in completing paperwork’s and in the obtaining of business permits required for acquisition of business property. Complicated processes like acquiring of a plant or construction permits has caused various hindrances and therefore making it more inconvenient for the businessmen

The very complicated irregular network of the domestic tax system that varies from state to state has taken away the ease of operating business in India and are therefore impending investments in India.

CORRECTIVE MEASURES TO MAKE THE SCHEME SUCCESSFUL

For a long time india was more dependent on the service sector which made it neglect the manufacturing sector to a great extent. The Make In India scheme is a welcoming move in this context. It will help india gain momentum to become the manufacturing powerhouse.This scheme will enhance the employment opportunities.it will provide various employements to the large pool of the young workers who join in the labour force every year. their employment will generate income which will then increase the purchasing power and the demands on the other hand for the manufactured goods

The campaign will ensure stronger bilateral ties among the continents and the countries as it highlights global vision. It will mutually benefit the countries in global exchange of the expertise and talents. But in order to achieve this certain changes have to be made and are necessary. They are as under

  • In order to boost the manufacturing sector of the country through this scheme the supply base of component and the material needs to be improved, acceleration in demand .challenges like provision of skilled manpower , removal of regulatory and procedural formalities , infrastructe development also have to be over powered.
  • A fair and a more sorted out tax system is the immediate need for the successful implementation of the campaign.
  • It is important to create a business friendly environment where it is important to gain the trust and the confidence of the investors
  • It is important to bring labour reforms through skilling, which will bring more efficiency in the manufacturing process as a whole.
  • The right execution of the project is of great importance at the state level itself. states will have to reform the laws even at the lower levels and facilitate implementation of policies and plans taken up by the centre.

CHAPTER 4:

CONCLUSION

‘Make in India’ campaign is a Lion’s step towards making the country a destination for global manufacturing.

Modi Government’s push for manufacturing sector in India is a laudable idea especially during the time when a number of big companies are finding an alternative to China due to its increasing cost “Manufacturing offers a better way to employ millions of workers , providing a stable source of foreign currency, and create a smooth and a reliable path for development. Manufacturing will enhance country’s macro-economicstability besides creating jobs.. Better infrastructure and easier regulations, especially around labour, will help propel manufacturing,”

The timing is perfect for India. Labour costs are rising in China; Japanese firms are shifting production from China because of military tensions; and the rupee has fallen, making Indian workers more competitive.

According to what we have researched, we think that it will be a great success as projects like these are needed today and any such step can surely bring success and development in our economy. The “Make in India” policy will act as a first reference point on aspects of regulatory and policy issues for the foreign investors and assist them in obtaining regulatory clearances. Now sooner the Competitiveness of manufacturing will now be removed but India will become one of the most competitive manufacturing countries in the world.

Mr. Modi is working hard towards this project and is dedicated enough to take it through. He has built a certain kind of trust and confidence in people’s mind which can further encourage him to make this project a success.

Modi has sought to inject a new optimism among the businesses and assured them that the investors will be treated with a lot of trust.

India is becoming accustomed to Modi’s symbolic gestures. He has established himself as a tough politician who expects ministers and bureaucrats to turn up for work on time, and actually take decisions, and keep files moving, so that these policies turns out into action. Clearly a man on a mission to make India work, he also wants to make the world realise it’s happening.

Sitting at his desk in Gujarat, Mr Modi said that when he first took charge of the state’s economy, “I thought: the sky is the limit.” A similar ambition today would serve India well.


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