‘Make in India’ can accelerate economic growth
With his ‘Make in India’ campaign, Prime Minister Narendra Modi has sought to revitalise the India Story that had lost much of its sheen in this past decade. The first generation of economic reforms, introduced in the 1990s, had propelled the country into the 21st century, created a new middle class and lifted thousands out of abject poverty. Three decades later, Prime Minister Modi has promised to usher in the much-needed, and indeed rather delayed, second generation of reforms that will, once again, put India on the path of growth and prosperity. The ‘Make in India’ initiative, launched amidst much fanfare on Thursday, is not really one project or scheme but a blueprint for economic regeneration. At its core, lies the idea of developing India as a global manufacturing hub. This is an idea whose time has come. As the Prime Minister himself noted, the interplay of the two ‘D's of ‘demographic’ and ‘demand’ in India makes this country uniquely suited to be a global manufacturing hub. On the one hand, India's large, relatively well-educated, and mostly English-speaking population is a skilled labour pool that can be hired for a competitive price. On the other, this same pool, particularly its growing middle class segment, also doubles as a large consumer market. Add to that the fact that India is also a politically stable democracy, and you have the proverbial cherry on the cake.
‘Make in India’ functions at several level: First, it is about wooing foreign investors to set up shop in India. This country cannot achieve the kind of growth and development it needs without foreign funding. In fact, it is hardly a coincidence that the initiative has been launched on the eve of the Prime Minister's trip to the US where he will hardsell India much like he did during his trip to Japan and while hosting the Chinese President. However, winning investment pledges abroad makes little sense unless the home front invests the money effectively. This is where the next level of the ‘Make in India’ campaign kicks in — wide-ranging economic and administrative reforms so as to improve India's ease-of-doing-business ratings. These will range from new projects (such as the the ebiz initiative, a single online window for all investment-related services including applying for industrial licences and making payments to state agencies) to relatively minor changes in the existing rules (extending the validity of industrial licences) to major upgrades in the law (for example, de-regulation and de-licensing, syncing Indian standards with international norms), to overall policy overhauls (setting up a new intellectual policy regime and pragmatic labour and land acquisition laws). But cleaning up the paperwork, though crucial, will not be adequate, unless complemented by better physical infrastructure on the ground. Hence, at yet another level, ‘Make in India’ will also be about boosting infrastructure — new roads and highways, sea ports and airports, bridges and tunnels — through collaboration with foreign partners.