make in india
TRANSCRIPT
2015
.
SUMMER ASSIGNMENT
CONTENTS
INTRODUCTION……………………………………………. 4
KEY HIGLIGHTS OF PROJECT………………………….. 5-10
INFRASTRUCTURE……………………………………...... 11-13
NEW SECTORS……………………………………………. 14-15
NEW MINDSET…………………………………………….. 16-18
FOREIGN DIRECT INVESTMENT………………………. 19-24
NATIONAL MANUFACTURING………………………….. 26-30
STRENGTH OF INDIAN MANUFACTURING…………. 31
HURDLES TO MAKE IN INDIA………………………….. 32-35
CONCLUSION…………………………………………….. 35-36
INTRODUCTION
The ‘MAKE IN INDIA’ initiative was launched on September 25, 2014
with an aim of providing global
recognition to the Indian economy. The program includesmajor new
initiatives designed to facilitate investment,foster innovation, protect
intellectual property, and buildbest-in-class manufacturing
infrastructure.Besides focus on enabling manufacture, major
initiativeshave been taken in 2014 for improving the ‘EASE OFDOING
BUSINESS’ in India through simplification and rationalization of
existingrules and the introduction ofinformation technology to make
governance more efficient and effective.
KEY HIGHLIGHTS OF PROJECTS
“Value of top priority projects ready for procurement in FY 2015-16 is about USD 24000 millions, half of which are on PPP basis. Top visionary projects to be implemented over the next five years are worth of USD 34080 millions” ROAD TRANSPORT AND HIGHWAYS > Out of 26 projects 8 projects worth USD 1294 millions are on PPP basis. > Most of the projects are around AKIC corridor. > 26 projects worth USD 3638 millions are in final preparation stages before implementation, 9 are ready to be bid out and 16 are at various stages of the bidding process.
> Top visionary projects to be implemented in the next few years are worth USD 6032 millions of which projects worth USD 2682 millions are on PPP basis. PORTS AND SHIPPING
> Central Government actively focuses on development/upgradation of capacities across all coastal states. > Top 11 projects for FY 2015-16 amount to USD 1847 millions, almost 90% of which are on PPP basis. > Top 10 visionary projects in shipping for the next few years are worth USD 8853 millions out of whichabout 25% of projects are on PPP mode and 70% are Government/PPP. POWER > Top 10 projects for FY 2015-16 amount to USD 17473 millions, out of which 5 projects are on PPP basis. > 4 thermal power projects with installed capacity of more than 8,200 MW will be out for bidding in FY 2015-16. > Top 10 visionary projects in power for the next five years are worth above USD 19200 millions out of which 3 projects are on PPP basis. CIVIL AVIATION
> PPP opportunity for Operation, Maintenance and Development of the four existing airports is being tendered. > Development of cargo hubs in 6 metro airports along with other extension and strengthening projects is proposed over the next few years. DELHI MUMBAI INDUSTRIAL CORRIDOR > 4 mega projects under DMIC umbrella are ready for procurement in the next financial year. > Total value of these projects is USD 644 millions.
RAILWAYS > Majority of projects proposed for FY 2015-16 are on PPP basis. > Total value of projects getting ready for procurement is above USD 1600 millions. > Visionary railway projects upcoming in the next few years are worth USD 41120 millions.
POLICIES.
The Make in India program includes major new initiatives
designed to facilitate investment, foster innovation, protect
intellectual property, and build best-in-class manufacturing
infrastructure.
NEW PROCESSES.
Doing business in India just got easier – new de-licensing and deregulation measures are reducing complexity, and significantly increasing speed and transparency.
Process of applying for Industrial License & Industrial Entrepreneur Memorandum made online on 24×7 basis through eBiz portal.
Validity of Industrial license extended to three years.
States asked to introduce self-certification and third party certification under Boilers Act.
Major components of Defence products’ list excluded from industrial licensing.
Dual use items having military as well as civilian applications deregulated.
Services of all Central Govt. Departments & Ministries will be integrated with the eBiz – a single window IT platform for services by 31 Dec. 2014.
Process of obtaining environmental clearances made online.
Following advisories sent to all Departments/ State Governments to simplify and rationalize regulatory environment.
All returns should be filed on-line through a unified form.
A check-list of required compliances should be placed on Ministry’s/Department’s web portal.
All registers required to be maintained by the business should be replaced with a single electronic register.
No inspection should be undertaken without the approval of the Head of the Department.
For all non-risk, non-hazardous businesses a system of self-certification to be introduced.
INFRASTRUCTURE
India’s manufacturing infrastructure and capacity for innovation is poised for phenomenal growth: new smart cities and industrial clusters, being developed in identified industrial corridors having connectivity, new youth-focused programs and institutions dedicated to developing specialized skills.
Impetus on developing Industrial Corridors and Smart Cities.
A new ‘National Industrial Corridor Development Authority’ is being created to coordinate, integrate, monitor and supervise development of all Industrial Corridors.
Work on 5 smart cities in progress as a part of the Delhi-Mumbai Industrial Corridor: Dholera, Shendra-Bidkin, Greater
Noida , Ujjain and Gurgaon.
Chennai-Bengaluru Industrial Corridor: master Planning for 3 new Industrial Nodes [Ponneri (TN), Krishnapatnam (AP), Tumkur (Karnataka)] in progress.
The East Coast Economic Corridor (ECEC) with Chennai-Vizag Industrial Corridor as the first phase of this project: Feasibility Study commissioned by ADB.
Amritsar-Kolkata Industrial Corridor: DMICDC selected as Nodal Agency for doing Feasibility Study, which is being conducted at fast pace.
North-eastern part of India planned to be linked with other Industrial corridors in cooperation with government in Japan.
New Industrial Clusters for promoting advance practices in manufacturing.
Approval accorded to 21 Industrial projects under Modified Industrial Infrastructure Upgradation Scheme with an emphasis on:
1. Use of recycled water through zero liquid discharging
systems.
2. Central Effluent Treatment plants.
Approval accorded to 17 National Investment and Manufacturing zones.
Nurturing Innovation – approval obtained for strengthening
Intellectual Property regime in the country through:
1. Creation of 1,033 posts.
2. Further upgradation of IT facilities.
3. Compliance with global standards.
4. Application processes made online.
An Act recognizing National Institute of Design (NID), Ahmedabad, as an institute of National Importance notified. This will enable NID to confer degrees, promote research and function as an Apex body in Design Education. Four more NIDs are being developed.
Major impetus given to skill development through Indian Leather Development Programme:
1. Training imparted to 51,216 youth in the last 100 days.
2. It is further planned to train 1,44,000 youth annually. 3. For augmentation of training infrastructure, funds released for establishment of 4 new branches of Footwear Design & Development Institute at Hyderabad, Patna, Banur (Punjab) and Ankleshwar (Gujarat).
NEW SECTORS
With the easing of investment caps and controls, India’s high- value industrial sectors – defense, construction and railways – are now open to global participation.
Policy in Defence sector liberalised and FDI cap raised from 26% to 49%.
Portfolio investment in Defence sector permitted up to 24% under the automatic route.
100% FDI allowed in Defence sector for modern and state of the art technology on case to case basis.
100% FDI under automatic route permitted in construction, operation and maintenance in specified Rail Infrastructure projects such as:
1. Suburban corridor projects through PPP
2. High speed train projects
3. Dedicated freight lines
4. Rolling stock including train sets and locomotives/coaches manufacturing and maintenance facilities
5. Railway electrification
6. Signaling systems
7. Freight terminals
8. Passenger terminals
9. Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line
10. Mass Rapid Transport Systems
Easing of norms underway for FDI in the Construction Development sector.
NEW MINDSET
Most importantly, the Make in India program represents an atti3tudinal shift in how India relates to investors: not as a permit-issuing authority, but as a true business partner.
Dedicated teams that will guide and assist first-time investors, from time of arrival.
Focussed targeting of companies across sectors.
The new government at the Centre is perceived to be business friendly and has started a number of initiatives. Programmes like ‘Swachch Bharat’, ‘Nari Shakti’, ‘Beti Bachao aur Beti Padao’, ‘Digital India’, ‘Make in India’ and ‘100 Smart Cities’ are excellent initial steps in transforming India into a major economic force. But there must be an agency, be it the Niti Aayog or something else, that can develop a coherent connection between these various programmes. For instance, can ‘Nari Shakti’, ‘Beti Bachao aur Beti Padao’ and ‘Skilled India’ programmes lead to women being employed in large numbers in our engineering shop floors or becoming managers in global companies? That our women-folk can be equal to men in every task was evident in this year’s Republic Day parade when lady officers led contingents of infantry, artillery, armours, navy, and air force, and presenting the guard of honour to the chief guest President Obama. The country needs to deeply reflect on its capabilities and opportunities and then devise an executable plan within a given time frame if its companies are to earn reputation and appreciation outside its territory. While, on one hand, we can arrogate the view that the world is looking at us for salvation, on the other, we get hardly any media attention outside our country. Our policymakers and industry captains need to come out of their traditional paternalistic mindsets and do a rethink about their notions of global competitiveness. Our corporate boards too must discuss and strategise about global opportunities and scalability, utilising women power, and marrying digital technologies with production. Then we can
think of becoming a respected and economically powerful nation.
FOREIGN DIRECT INVESTMENT
India has already marked its presence as one of the fastest growing economies of the world. It has been ranked among the top 3 attractive destinations for inbound investments. Since 1991, the regulatory environment in terms of foreign investment has been consistently eased to make it investor-friendly.
RECENT POLICY MEASURES
100% FDI allowed in medical devices
FDI cap increased in insurance & sub-activities from 26% to 49%
100% FDI allowed in the telecom sector.
100% FDI in single-brand retail.
FDI in commodity exchanges, stock exchanges & depositories, power exchanges, petroleum refining by PSUs, courier services under the government route has now been brought under the automatic route.
Removal of restriction in tea plantation sector.
FDI limit raised to 74% in credit information & 100% in asset reconstruction companies.
FDI limit of 26% in defence sector raised to 49% under Government approval route. Foreign Portfolio Investment up to 24% permitted under automatic route. FDI beyond 49% is also allowed on a case to case basis with the approval of Cabinet Committee on Security.
Construction, operation and maintenance of specified activities of Railway sector opened to 100% foreign direct investment under automatic route.
SECTORS WHERE FOREIGN DIRECT INVESTMENT IS PROHIBITED :
Lottery Business including Government /private lottery, online lotteries, etc.
Gambling and Betting including casinos etc.
Chit funds
Nidhi company-(borrowing from members and lending to members only).
Trading in Transferable Development Rights (TDRs)
Real Estate Business (other than construction development) or Construction of Farm Houses
Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than construction, operation and maintenance of (i) Suburban corridor projects through PPP, (ii) High speed train projects, (iii) Dedicated freight lines, (iv) Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and (x) Mass Rapid Transport Systems.)
Services like legal, book keeping, accounting & auditing.
CENTRAL GOVERNMENT INCENTIVES
Investment allowance (additional depreciation) at the rate of 15 percent to manufacturing companies that invest more than INR 1 billion in plant and machinery available till to 31.3.2015.
Incentives available to unit’s set-up in SEZ, NIMZ etc. and EOUs.
Exports incentives like duty drawback, duty exemption/remission schemes, focus products & market schemes etc.
Areas based incentives like unit set-up in north east region, Jammu & Kashmir, Himachal Pradesh, Uttarakhand.
Sector specific incentives like M-SIPS in electronics.
STATE GOVERNMENT INCENTIVES
Each state government has its own incentive policy, which offers various types of incentives based on the amount of investments, project location, employment generation, etc. The incentives differ from state to state and are generally laid down in each state’s industrial policy.
The broad categories of state incentives include: stamp duty exemption for land acquisition, refund or exemption of value added tax, exemption from payment of electricity duty etc.
NATIONAL MANUFACTURING
VISION:
An increase in manufacturing sector growth to 12-14% per annum over the medium term.
An increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
To create 100 million additional jobs by 2022 in manufacturing sector.
Creation of appropriate skill sets among rural migrants and the urban poor for inclusive growth.
An increase in domestic value addition and technological depth in manufacturing.
Enhancing the global competitiveness of the Indian manufacturing sector.
Ensuring sustainability of growth, particularly with regard to environment.
FOCUS SECTORS:
Employment-intensive industries like textiles and garments, leather and footwear, gems and jewellery and food processing industries.
Capital goods industries like machine tools, heavy electrical equipment, heavy transport, earthmoving & mining equipment.
Industries with strategic significance like aerospace, shipping, IT hardware & electronics, telecommunication equipment, defence equipment and solar energy.
Industries where India enjoys a competitive advantage such as automobiles, pharmaceuticals & medical equipment.
Small & medium enterprises.
Public sector enterprises.
NATIONAL INVESTMENT & MANUFACTURING ZONES (NIMZ):
The National Investment and Manufacturing Zones are being conceived as giant industrial greenfield townships to promote world-class manufacturing activities.
The minimum size is 5000 hectares (50 square kilometres) wherein the processing area has to be at least 30%.
The central government will be responsible for bearing the cost of master planning, improving/providing external physical infrastructure linkages including rail, road, ports, airports and telecom, providing institutional infrastructure for productivity, skill development and the promotion of domestic and global investments.
The identification of land will be undertaken by state governments. State governments will be responsible for water requirement, power connectivity, physical infrastructure, utility linkages, environmental impact studies and bearing the cost of resettlement and rehabilitation packages for the owners of acquired land.
The state government will also play a role in its acquisition if necessary.
In government, purchase preferences will be given to units in the national investment and manufacturing zones.
NATIONAL INVESTMENT AND MANUFACTURING ZONES IDENTIFIED UNDER DMIC:
Ahmedabad-Dholera Investment region, Gujarat
Shendra-Bidkin Industrial Park City near Aurangabad, Maharashtra
Manesar-Bawal investment Region, Haryana
Khushkhera-Bhiwadi-Neemrana Investment Region, Rajasthan
Pithampur-Dhar-Mhow Investment Region, Madhya Pradesh
Dadri-Noida-Ghaziabad Investment Region, Uttar Pradesh
Dighi-Port Industrial Area, Maharashtra
Jodhpur-Pali-Marwar region, Rajasthan.
NATIONAL INVESTMENT AND MANUFACTURING ZONES IDENTIFIED OUTSIDE DMIC:
Kuhi and Umred Taluka of Nagpur district, Maharashtra
Tumkur, Karnataka
Chittoor, Andhra Pradesh
Medak, Telangana
Prakasam, Andhra Pradesh
Gulbarga, Karnataka
Kolar, Karnataka
Bidar, Karnataka
Kalinganagar, Jajpur District, OdishA
.
STRENGTH OF INDIAN MANUFACTURING
India has already marked its presence as one of the fastest growing economies of the world.
The country is expected to rank amongst the world’s top three growth economies and amongst the top three manufacturing destinations by 2020.
Favourable demographic dividends for the next 2-3 decades. Sustained availability of quality workforce.
The cost of manpower is relatively low as compared to other countries.
Responsible business houses operating with credibility and professionalism.
Strong consumerism in the domestic market.
Strong technical and engineering capabilities backed by top-notch scientific and technical institutes.
Well-regulated and stable financial markets open to foreign investors.
CHALLENGES TO MAKE IN INDIA
A leading Economist said the big challenge for ‘Make in India’ campaign would face constant comparison with China's 'Made in China' campaign. The China launched the campaign at the same day as India seeking to retain its manufacturing prowess. “India should constantly keep up its strength so as to outpace China's supremacy in the manufacturing sector,”
Sales tax, octroi and entry tax are other taxes that a
manufacturing unit has to bear. While these will go
away when GST is implemented it will take at least 3-5
years for that to happen.
Higher the value addition, the greater the usage of
electricity in manufacturing. There is 60 per cent
additional charge put on industry so that farmers can
get free power for agriculture. Lack of power or
captive power supply adds to the cost of production,
reducing competitiveness. A much better model of
charging for power has to be deployed so that
manufacturing should not pay for giving subsidies to
farmers.
Logistics: Government should come up with National
integrated logistic policy (NLIP) which can
comprehensively address the logistic issues
emerging out of road, rail, waterways and air transport
comprehensively covering Rail dedicated freight
corridors, Coastal freight corridors, multi modal
logistic parks, better warehousing and logistic skill
development
Another issue that affects both current and new
manufacturing units is land. The UPA government
created the biggest bottleneck with its land
acquisition bill, which makes land so expensive that it
cannot be acquired for manufacturing. The only place
land is available is in places that are uninhabited or
barren, andthis does not make manufacturing
attractive for labour.
Given the need for a strong Intellectual Property (IP) regime also mandated by WTO, following steps need to be taken from a long-term point of view
Improving IP enforcement mechanisms
Accelerate the process of Patent Examination and according patents
Encouraging joint IP filings by industry / academia / research institutes. This will strengthen joint working amongst Industry, Academia and R&D institutes
Encouraging MSME sectors for filing IPs.
SIMPLIFICATION OF REGULATORY ENVIRONMENTS
Timelines will be defined for all clearances.
Central & State governments to provide exemptions from rules and regulations related to labour, environment etc. subject to the fulfilment of certain conditions.
Mechanisms for the cooperation of public or private institutions with government inspection services under the overall control of statutory authorities to be developed.
Process of clearances by centre and state authorities to be progressively web-enabled.
A combined application form and a common register to be developed.
The submission of multiple returns for different departments will be replaced by one simplified monthly/quarterly return.
A single window clearance for units in NIMZ.
Ease in environment approvals.
India has the capability to push its manufacturing
contribution to GDP to 25% by 2025. Government has to
act as the central pivot of aligning industries, private
companies, public sectors and all stakeholders in realizing
this vision. Government has to put policies in place be it
sector reforms, labour reforms or the elimination of
business barriers. 11. The Government of India has taken
a number of steps to further encourage investment and
improve business climate. „Make in India‟ mission is one
such long term initiative which will help to realize the
dream of transforming India into a „manufacturing hub‟.
Hon‟ble Prime Minister‟s call for „zero defect and zero
effect‟ manufacturing resonates well with our industry as
we grow and produce for the world. India‟s expanding
economy offers equal investment opportunities to
domestic entrepreneurs and international players. It is our
responsibility to leverage emerging opportunities and
work towards shaping this „manufacturing vision‟. Indian
Manufacturing is slowly but surely sweeping back in the
national economic space.
References
1. Manufacturing policy of India
http://dipp.nic.in/english/policies/national_manufacturing_policy_
25october2011.pdf
2.12th five year plan
http://planningcommission.gov.in/plans/planrel/12thplan/pdf/12fy
p_vol2.pdf
3. http://www.doingbusiness.org/data/exploreeconomies/india/
4. Building India transforming the nation’s logistics
infrastructure – Mckinsey & Company.
5. Powering India Road to 2019 –Mckinsey & Company.
6. Indian Labour and employment report- Institute for Human
Development.
7. High university enrolment, low graduate employment-
Analysing the paradox in Afghanistan, Bangladesh, India, Nepal,
Pakistan and Sri Lanka- An Economist Intelligence Unit report
for the British Council January 2014.
8. National Health Mission- http://nrhm.gov.in/ 9. National skill development corporation http://www.nsdcindia.org/
10. Post graduate programme for executives for visionary
leadership in manufacturing -
https://programslive.iimcal.ac.in/pgpex-vlm.
11. National Manufacturing competitiveness council (NMCC)-
http://www.nmcc.nic.in/
12. Make in India - http://www.makeinindia.com/
13. Census India 2011 Report-
http://censusindia.gov.in/2011-prov-
results/data_files/india/Final_PPT_2011_chapter6.pdf
14. Millennium Development Goals-
http://www.undp.org/content/undp/en/home/mdgoverview.html
15. Union budget 2014-2015.
http://www.undp.org/content/undp/en/home/mdgoverview.html
16. Science, Technology & Innovation policy 2013 -
http://dst.gov.in/sti-policy-eng.pdf.
