How Make in India will help revive and boost manufacturing

Aug 11, 2015, 03.59PM IST

By Ashok Chaturvedi

Soon after the NDA government took charge at the Centre with Prime Minister Narendra Modi
at the helm, an ambitious plan was drawn up to rev up manufacturing in the country. Dubbed as
"Make in India", the ambitious plan urged everyone within the country and abroad to set up
manufacturing base in India.
The clarion call to make things in India was not only limited to big industrial houses, but also for scores
of SMEs that form the backbone of manufacturing in the country. While on one hand the plan wanted to
make it easier to set up new manufacturing units, it also wanted to make life easier for manufacturers to
operate their business.

Manufacturing has always been considered as one of the most vital cogs in the wheel of
development and the Industrial revolution was a testament to that. In the modern age, China's
accomplishment and development in manufacturing are well referenced. Beyond that, South
Korea's achievements and the role of the manufacturing sector in the country's development are
worth noticing.
Though our Industrial Production rose by 3% in June 2015 when compared to same time last
year, what is troubling is that according to the recent Economic Survey, in India items like radio,
TV, communication equipment & apparatus, accounting and computing machinery have
registered high negative growth while these very items have shown positive growth in the rest of
the world.
According to industry projections, India will have to import $300 billion worth of electronics out
of the total demand of $400 billion over the next six years. Alarming as it may sound, this would
mean our import bill for electronics will be more than that of oil. This, along with a host of other
issues means "Make in India" as a flagship initiative is the need of the hour.
Why do we need it?
1. High level of productivity: In economic parlance productivity is measured as the value of
output obtained with each unit of input. For example, if in an hour a worker produces 2 units of
something that is valued at Rs. 100 each, then his productivity works out to Rs. 200. It is well
known that economic development can only happen when we move from low productivity to

high productivity activities. While India is primarily an agrarian society, industrial productivity
is low and hence manufacturing can be the real prime-mover for growth. This will in turn ensure
a higher GDP rate for the country.
Uflex within the Packaging Industry faced overwhelming odds to get to where we are today but I
still see thousands manufacturers still not been able to solve the puzzle around getting the
productivity up. Make in India has to address this issue which is as much a concern for the entire
sector.
2) Self Reliance: A strong manufacturing industry is the pedestal for a strong self reliant
country. Indigenous manufacturing is essential for pertinently sensitive sectors like defence and
this can only happen when the manufacturing capabilities are significantly augmented. The Make
in India scheme wants to drive India towards self reliance in the area of manufacturing, which
bodes perfectly well for the safety and security of the country.
3) Boost to Exports: Make in India would strengthen India's production base and will gradually
reduce our country's dependence on imports. With manufacturing and production throbbing,
India will be in a good stead to increase its export base thereby improving its Current Account
situation.
4) Employment: Manufacturing will pave the way for large scale employment of the youth. This
comes especially at a time when rising labour costs in China is threatening to dislodge its
advantage and surely a country like India stands to gain. While in the age of automation, the
requirements on labor have eased, the registered manufacturing sector has the potential to create
large scale employment avenues. Government must ensure that the Make in India scheme allows
millions of youth join the job market thereby ending their search for meaningful employment
opportunities. Any scheme that does not address the issue of unemployment can only be termed
as counterproductive. In Sanand, Gujarat, Uflex is setting up an aseptic packaging plant for
packing liquid products, which will be our most recent contribution to Government's 'Make in
India' initiative. Our project will give a boost to employment amongst other things in the region.
5) Skill: While we look at the progress and what manufacturing has meant for China, we should
only consider the best practices. China flourished primarily because of the labour arbitrage as
low-skilled workers made a beeline in the country. However, we need to guard against India
becoming a sweatshop for the developed world and lay utmost emphasis on skilled
manufacturing and human capital sustainability.