India’s new government launched ‘Make in India’ as an initiative to encourage companies to manufacture products locally. It is a program designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build the best-in-class manufacturing infrastructure. The government is positive on the developing contours of the Make in India program as most government ministries have aligned their goals and targets to further this mission. Here are the focus points for Make in India, according to report by Barclay’s, a British bank.
Here are pointers to note:
1. Foreign direct investment: The main goal for Make in India is foreign direct investment. It aims to boost local manufacturing, technology transfer and skill development across sectors. So far, the new government has eased requirements in the construction sector, permitted 100% FDI in railways, allowed 49% on approval and above 49% on case-by-case in the defence.
2. Ease of doing business: For the economic world, the government is making efforts to reduce complexities in terms of deregulation and de-license. The BJP government aims to achieve greater transparency, rule-based processes, timely dispute resolution, single-window and simple processes for the Make in India campaign. The management has eased regulatory environment vis ebusiness, industrial licensing and compliance requirements made less stringent and self-compliance driven in heavy industries and approvals are now process driven by the environment ministry. In the commerce sector, the ministry has reduced paper work for imports and exports.
3. Quality and technology: As a part of the Make in India mission, the government plans to create eco-system for indigenous technology development. In order to achieve this, the health industry has introduced schemes with outlay of Rs 9 billion for capital goods sector for product and technology development. In the defence sector, the government intends higher domestic procurement.
4. Labour reforms: Easier scale for hiring or laying off and lower compliance burden are the goals Make in India is trying to accomplish. Despite India’s overlapping outdated labour laws, the government has performed an early stab at labour reforms with amendments to laws pertaining to apprenticeship, industrial closures, and labour compliance.
5. Infrastructure: The road ministry has generated higher funding and targets allocated to roads, railway, and ports. Apart from the 100 smart city project, industrial corridors are under construction. The government strives to build transport, power infrastructure, industrial corridors and export oriented infrastructure.
6. Tax reforms: As a part of the Make in India mission, the new government aims to reduce tax litigations and unclog the complexity in the tax code and create a national market. The Finance Ministry is in full swing by reducing custom duty on a number of inputs to domestic industry like steel grade limestone, dolomite in financial 2015-16 union budget.
7. SME support: One of the Make in India program’s objective is to make small and medium enterprises export-oriented by providing technology, credit and value chain support. Tax pass through for venture capital funds, proposes inclusion of lending to SMEs as priority sector lending, subsidy for installation of machinery, and 15 new technology centres are some measures the government has taken to make progress in this initiative.
8. Skill development: Skill development is one of the key objectives to achieve the Make in India mission. Skilled manpower for manufacturing and technology intensive industries are some of the goals the government wishes to attain. So far, the government has launched ‘Skill India’ program that envisages expansion of skill councils in partnership with India Inc and opened new higher education institutions.
This work is produced by Simplus Information Services Pvt Ltd.