PM Modi launched the ‘Make in India’ initiative 10 years ago this month, with ambitious goals aimed at transforming the country’s manufacturing landscape. But has it really achieved its objectives? The numbers from the government’s data itself tell the story - Let’s look into the facts and figures to see where we stand.
The Make in India project had three primary objectives
- The goal was to elevate manufacturing's contribution to India's GDP from 16.4% in 2014 to 25% by 2025. However, as of 2024, this figure has only risen to about 17.3%, which shows a sluggish growth that is concerning for economic stability and growth. Plus, the share of value addition by the manufacturing sector is reported at 15.9% in 2023-24, compared to 16.7% in 2013-14, which is lower than where we even started.
- The initiative aimed for an annual growth rate of 12-14% in manufacturing. Instead, the sector has only managed a modest average growth rate of 5.2% over the past decade.
- Job Creation: Modi's vision included creating 100 million jobs in the manufacturing sector by 2022, which as a number itself sounds like a big dream since even major multinational companies don’t produce those many jobs. Well, data from the State Bank of India reveals that approximately 8.9 million jobs were created across both manufacturing and services during this period, far short of the target.
While Make in India has supported thousands of businesses, macroeconomic indicators suggest that the initiative has not met its lofty aspirations.
Economic Impact
The initiative was supposed to stabilize and grow the economy, but the reality is stark. India's share of global exports has decreased from 25.2% in 2013-14 to just 22.7% in 2023-24, while imports have surged, indicating a troubling trend towards reduced self-reliance.
Moreover, despite some successes - like becoming the second-largest mobile phone producer globally and attracting ₹1.97 lakh crore (approximately $24 billion) in investments through Production Linked Incentive (PLI) schemes - the overall contribution of manufacturing to GDP has remained flat over the last decade.
But the achievements are good too.
- India is now recognized as the second-largest mobile phone manufacturer globally.
- PLIs have generated significant investments and created around 8 lakh jobs.
- India's Ease of Doing Business improved dramatically, moving from 142nd to 63rd place.
- The PM GatiShakti initiative has improved logistics and transport connectivity, while India received $667.41 billion in Foreign Direct Investment (FDI) from 2014-2024.
However, these achievements are overshadowed by persistent challenges.
Are we employed well?
Despite claims from government officials that manufacturing jobs have surged, evidence suggests otherwise. For instance, major automobile manufacturers have laid off substantial numbers of workers since implementing PLI schemes. The share of manufacturing jobs has also declined from 11.6% in 2014-15 to 10.6% in 2022-23.
Additionally, over 99% of India's 63 million MSMEs operate in the unorganized sector, which limits their ability to create productive jobs. The rise of contract workers - now making up 42.5% of the manufacturing workforce - further complicates job security and stability for many workers.
The structure looks fracture
Foreign investors face significant hurdles when considering investment in Indian manufacturing. These include complex land acquisition processes, outdated labor laws, and inconsistent taxation policies at various levels of government. While elite educational institutions produce skilled engineers, there remains skepticism about the competence of vocational graduates, which hampers our overall industrial growth.
So, while Make in India has made strides in certain areas, its overall impact on manufacturing's GDP contribution, job creation, and export performance remains disappointing after ten years. As we look ahead, it may be time to reassess our targets and execution strategies to ensure that they are realistic and achievable.
Questions remain: Do we believe we can meet these goals? What changes are necessary for a more robust manufacturing sector?
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