Posted in Marketing & Strategy Articles, Total Reads: 3206
, Published on 02 November 2014
With the intention of “First Develop India” (FDI), Narendra Modi launched the Make in India campaign on 25th September 2014 with the agenda of making a shift to a manufacturing driven economy from a service oriented economy. It includes 25 industrial sectors which needs a positive transformation for the development of the manufacturing sector of the economy. The manufacturing sector of the economy contributes roughly to 15% of the GDP.
The programme will focus on the development of the country’s infrastructure and will be involved in creation of the digital network that will lead to the emergence of India as a global hub for investments in the sector of manufacturing. It believes that development is not a political agenda but a necessity for the development of an economy. The programme gives a lot of emphasis on public-private partnership and skill development. The ceremony was attended by the biggies of many Indian and foreign companies including ITC, Lockheed Martin, Wipro, Reliance Group, Tata Group and ICICI. The heads of these companies showed their concerns about the rising inflation and unemployment of the country, need of bringing reforms in the labour laws and credited the growth in the manufacturing sector for this as a solution. The launching ceremony was organized two weeks after the government cleared 11 infrastructural related proposals which was kept pending for years.
In the past few years, India has witnessed a lot of business related issues which has degraded the name of India as a business doing country. The recent Vodafone tax issue, Jindal and Vedanta land controversy led to India’s ranking to 134 out of 189 countries in the world. A foreign company will invest in an economy if the infrastructural scenario of the economy is favourable and up to the standard. To attain that India has to be involved more into building up the infrastructure by linking all of the business hubs via roads which needs clearance of the transportation related projects. Some of the labour laws followed by the country are dated as old as 1940s which certainly needs a change to match up with the changing economical and political environment.
The commencement of the reforms has initiated by the announcement of clearance of projects worth 2.74 lakh crores this year. Every year demand for 10 million new jobs is created in the economy that will be catered via this initiative. Since the results, Modi has been visiting foreign countries in order to uplift the image of the brand India in the minds of the foreign investors. Right before this programme Japan and China agreed to invest a sum of $55 billion in the economy over the next five years. Few weeks later the United States was awestruck by the promises and talks of Modi about his government’s efforts in bringing economic and legal clarity in the economy. With no figures mentioned the US promised to participate in the portfolio of India assuring investment in the manufacturing sector as a part of the “Make in India” campaign. The initiative aims in attaining a figure of 22% contribution in the GDP by the manufacturing sector of the economy.
An undervalued currency is required for making an economy a manufacturing hub. Japan and China because of their undervalued currencies emerged as giants of manufacturing economies which is a bleak situation for India. It was the under-valued currency that led to the emergence of these Asian countries as export oriented ones. On the other hand due to a managed float currency system the country has been facing currency fluctuation which becomes a major factor for the growth strategy for the economy. It is almost impossible that India will get the advantage of an undervalued currency which was the case for China, Japan and other Asian economies. RBI has been taking a lot of steps to stabilize the currency so that the currency doesn’t impact the growth. With a stable home currency and realistic objectives framed out by the government, India will be benefited from this campaign and will be able to make its name as a manufacturing hub of the world.
This article has been authored by Pushpanjali Mitra from Symbiosis Institute of Management Studies
If you are interested in writing articles for us, Submit Here