The ‘Make in India’ campaign was coined by the Prime Minister of India, Shri Narendra Modi on Sept 25, 2014 with a view to attract businesses from around the world to invest and manufacture in India. Through this initiative, the Government aims to promote the manufacturing of low-cost, eco-friendly and zero-defect products, facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure.
The vision is to transform India into a manufacturing and technology hub, which puts the country on the center stage of global economic activity, through primary focus on 25 key sectors of Indian economy, by ensuring
– Attractiveness amongst potential investors
– Job creation; Readiness of human resources, skill and capability enhancement; Conducive culture and environment
Why it matters to India and its people?
India ranks a dismal 131st in terms of per capita GDP. India also stands 134th amongst 189 countries in World Bank’s Ease of Doing Business list. We also know that India’s manufacturing growth had slowed done in the last decade. It grew by just 7.25 per cent (2004-11). A total of 15 million jobs were created, while 10 million people joined India’s workforce every year (2005-12). Manufacturing approx. contributes 17 per cent of India’s GDP compared to 69 per cent (Services) and 14 per cent (Agriculture). Of the 474 million Indians employed, only 100 million did manufacturing jobs, compared to 232 million (Agriculture) and 142 million (Services).
For ensuring a quantum jump in India’s GDP, trade and economic growth, India’s Infrastructure, Industrial and Manufacturing sector have to play a catalyst role and transform itself in a very big way. India needs investments, world-class infrastructure, skill building, foreign collaboration, entrepreneurship, employment generation and productive environment in key sectors. Keeping in mind that each 1 per cent increase in FDI adds about 0.4 per cent to a country’s GDP growth, so to boost GDP growth by about 2 per cent, India will need about 5 per cent increase in FDI, which should come in the form of ‘First Development of India’. Potentially, such an approach has a big cascading impact on other parts of the economy and hence surest way to employ millions of workers in middle-income jobs.
Interestingly, ‘Make in India’ helps India play to its strengths of 3Ds: Democracy, Demographic Dividend and strong Demand. While the vision and objectives are clear, the path to success is certainly long-drawn and challenging. Some of the critical drawbacks revolve around procedural and regulatory clearances, lack of enabling infrastructure, stringent laws, bureaucracy, multiple taxation, land acquisition problems, environmental clearances, poor perception of India in terms of ease of doing business, and a lack of proven ability to compete at a global scale.
No doubt, ‘Make in India’ is an aspirational leap of faith by the Govt. of India, when they announced creation of 10 crores jobs in 10 years through 25 industry segments. Let us remember that it is not just about manufacturing in India alone. It has to be do with innovation, design, R&D, development, providing world-class services, creating ecosystem, supply chain, marketing, after sales support, human resource development, etc. Also, rather than being see it as function of ‘cost arbitrage’, ‘Make in India’ has to be seen as an opportunity for ‘capability arbitrage’ in order to be successful.
There is no doubt that we can get good investments, technology, best practices, expertize from outside, however, if people do not transform and get ready to embrace the change, India would be able to yield the desired and enduring results of this campaign. In this whole scenario, people become the critical lynchpins.
India’s most attractive feature for foreign investors is abundant labor. According to the UN Conference on Trade and Development, India’s workforce will reach 557 million by 2020, even as the global labor market tightens. However, their fitment into corporate set-up is a big question mark. It is a known fact that almost 70 per cent of the management graduates are not considered employable by the industry.
Economic Survey 2014-15 had highlighted on the need to initiate skill development programs to achieve the government’s objective of ‘Make in India’ campaign.
So, mere Launch of “Make in India” campaign, may not be enough.
“The success of this campaign depends upon potential, availability and Skill set of its workforce
To reinforce this labor cost advantage, the Indian Government is aiming to improve labor skills. Its National Skill Development Policy 2015 aims to ensure one Indian in four has skills appropriate to the labor market by 2020, and there are plans to open 1,500 more industrial training institutes and 5,000 skill development centers across the country.
Key lies in execution of the above initiatives and collaborating with industry to ensure sustainable success.
The partnership agenda between Government, Academia and Industry revolves around pillars mentioned above:
In order to attract talent, the perception of manufacturing sector has to change. Instead of providing employment, employability has to be focused. Social security systems have to be strengthened while at the same time providing flexibility to employers to rationalize their workforce. Inspector raj has to end in reality with simple and seamless labor laws. Also with today’s millennial workforce, new ways of hiring, learning, engagement, performance management, rewards and growth have to be explored. Application of technology, analytics and big data would be crucial to meet the changing aspirations of the emerging talent.
Last but not the least, a harmonious industrial relations is the critical driver for ‘Make in India’ campaign. Till the time, the organizational workforce, as also of all partners in the ecosystem, are not treated fairly, remain disengaged, not involved in decision making, not supported in skill development and not treated as collaborators in growth, till that time ‘Make in India’ will only remain a distant dream.
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