Make in India: Challenges & Prospects

There is no substitute for an industrial policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Make in India (MII)

Mains level: National Industrial Policy (NIP)

Make In India Registration

Central idea 

Make in India (MII) represents a departure from India’s historical self-sufficiency approach, prioritizing global competitiveness. The article critiques potential protectionist tendencies within MII, emphasizing the need for job creation and competitiveness. The efficacy of MII in delivering on promises, particularly in labor-intensive sectors, is a key focus for evaluating its impact.

Key Highlights:

  • Make in India (MII) diverges significantly from India’s historical self-sufficiency approach, focusing on global competitiveness rather than isolation.
  • The article critiques potential protectionist tendencies within MII, drawing attention to historical pitfalls of reckless protection in the 1970s and 1980s.
  • The piece discusses the critical need for MII to deliver on promises, particularly in creating a competitive manufacturing sector, and emphasizes the importance of job creation for India’s abundant labor force.

Key Challenges:

  • Concerns are raised about the implementation of MII, especially in sectors where tariff duties are increased for protection, potentially leading to negative consequences.
  • The article questions the efficacy of MII in comparison to its objectives, urging a closer examination of its impact on job creation and competitiveness.

Key Terms:

  • Make in India (MII): A policy initiative launched in 2014 to transform India into a global manufacturing and design hub.
  • License Raj: A regulatory system in India during the pre-1991 era that required businesses to obtain licenses for various activities, leading to bureaucracy and inefficiency.
  • Production-Linked Incentive (PLI): A scheme aimed at attracting investments in key sectors and cutting-edge technology to enhance efficiency in the manufacturing sector.

Key Phrases:

  • “MII is very different from self-sufficiency, and we should move on from this baseless comparison.”
  • “Every country that has ‘taken off’ before us has been export competitive.”
  • “Devising an industrial policy for mass job creation in India is the touchstone against which success ought to be gauged.”

Key Quotes:

  • “Job creation for our abundant factor, especially women, is key, and that is only possible with labor-intensive manufacturing.”
  • “In the absence of high frequency data on PLI, either on value added or jobs generated, a moral compass to shape a better world ought to be employed in abundant measure.”

Critical Analysis:

  • The article critically examines the potential protectionist aspects of MII, drawing parallels with historical challenges.
  • It highlights the importance of job creation, especially in labor-intensive sectors, as a crucial metric for evaluating the success of MII.
  • The absence of high-frequency data on PLI is emphasized, calling for a balance between data interpretation and moral considerations in policymaking.

Way Forward:

  • The article suggests that industrial policies, including the National Industrial Policy (NIP), should prioritize labor-intensive sectors to promote mass job creation.
  • It emphasizes the need for MII to continue focusing on excelling in labor-intensive manufacturing for the overall betterment of India’s economic landscape.

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