The Actual Impact of the ‘Make in India’ Scheme on the Indian Economy

Make in India is a type of Swadeshi movement that covers twenty-five sectors of the Indian economy. The plan was launched by the Indian Government on 25^th September 2014 in order to motivate the companies to invest their resources and manufacture their products in India. The aim of the plan was to convert India into a universal manufacturing hub. Discussions have been rife about the impact and importance of the plan from the very day of its launch. There is no one, from the top journalists to people who have cleared competitive exams like IES exam, who have not had an opinion about the impact of the scheme on Indian economy. Read on to find out some of pointers outlined by the experts.

The pros and cons of the Make in India campaign

The manufacturing sector is highly labor intensive. Thus, one of the biggest pros of the campaign as outlined by the IES officers is the generation of employment opportunities. This will naturally generate income and increase the share manufacturing sector holds in the GDP. The increased employment has far reaching effects. It will improve the purchasing power of people leading to poverty eradication and provide a stable consumer base for the companies in India. The model of Make in India is also export-oriented and that is bound to improve balance of payment of India and help in its accumulation of foreign exchange.

The major con pointed out by IES officers and other economic experts is that of comparative advantage. If India does not have the economic feasibility of manufacturing a commodity, the best thing to do would be to import the goods from a country which enjoys that advantage in its production. At the end of the day, it will prove more cost-effective to manufacture that product outside the country rather than attempting to manufacture it within the shores.

The overall impact of the campaign on Indian economy

The Make in India Campaign is all set to be the country’s ticket to the big league globally. In the past years, many countries have shown the example as they turned from agrarian economies to industrial ones and finally, service-based economies. India has, by and large, been an exception to this path. It has not really been affected by any Industrial revolution to an extent. The focus on services provides employment to countless people but it is not much of a help in reducing the disparity between rich and poor. Take the instance of any country like UK, US, or China. It had been industrial revolution that provided the base for the all-encompassing development of those nations.

The best example of this can be provided by China through its initiative decades ago. Before China started the campaign of Made in China campaign, more than half of its work force was engaged in agriculture. Agriculture was labor intensive and it was less productive as compared to the contribution it has on the GDP of the population involved. However, do not let that give you the idea that agricultural self-reliance is not vital for a country and there is any reason to undermine the significance of farming in the country. The point here is that agriculture can be carried out more productively.

That was exactly what China did with its Made in China initiative. The people working as farm labor in China moved to work as industrial labor in the capacities of supervisor, lineman, industrial labor, and so on while looking to earn higher. All of these was made possible by a number of determined companies and a few willing governments that came together to aid China in becoming an industrial giant. India today has more than half of its manpower working in the agricultural sector just like China. Thus, it has a similar chance of embarking upon the growth path that can shape the future of the billion people in the years to come.

The policy framework provided under Make in India has already been able to bring in foreign investment, enable the ease of carrying out business, and the management of intellectual property rights. The combined effects of all these helps the industries to set up their manufacturing bases in the country thereby, ensuring employment generation. Industries do not just grow themselves but they also empower the small businesses and help them progress as well. Another impact worth mentioning is that such a campaign helps to bring in critical knowledge about production and manufacturing into the population of India.

To complete the success story of Make in India, what is also the need of the hour is to ensure Make for India along with the rest of the world, in order to meet the rising and existing demands of the marketplace of the country.