September2023 :  Kurukshetra Magazine GIST : Micro Notes or Revision Notes : Kurukshetra Magazine Summary

 

Make in India Initiative

Launched

• September 25, 2014

Goals

• Encourage investment and innovation
• Build world-class infrastructure
• Make India a hub for manufacturing, design, and innovation
• Promote domestic manufacturing (“Vocal for Local”)

Why Make in India?

• Create jobs and improve skills in 27 sectors
• Increase manufacturing contribution to GDP
• Raise tax revenue
• Reduce regulations and bureaucracy
• Improve product quality standards
• Attract foreign direct investment (FDI)
• Promote growth in services and industry

Pillars of Make in India

• New Processes: Reforms to attract investment (domestic and foreign)
• New Infrastructure: Develop industrial corridors, smart cities, world-class infrastructure
• New Sectors: Focus on 27+ sectors for initial growth
• New Mindset: Change government interaction with businesses, become a partner in economic development

Key Reforms

• Since 2014, the government has:
  • Simplified the tax system
  • Attracted FDI
  • Increased economic efficiency and competitiveness
  • Introduced Production Linked Incentive (PLI) schemes for 14 manufacturing sectors

Attracting FDI

• Goods and Services Tax (GST)
• Reduced corporate tax
• Improved Ease of Doing Business (EoDB) ranking
• FDI policy reforms
• Reduced compliance burden
• Public procurement favoring domestic manufacturing
• Phased manufacturing programs

Advantages of Make in India

• Overall socioeconomic growth, especially in manufacturing and job creation
• Increased purchasing power and consumer base
• Reduced brain drain with focus on education and training
• Improved balance of payments and foreign exchange reserves
• Increased flow of FDI, technical expertise, and creative skills
• Higher credit ratings and attracting more investment

Challenges

• Land acquisition process
• Labor development ecosystem
• Tax rationalization and technology access
• Networking capacity building institutions
• Review of procedures and regulations
• World-class research and development infrastructure

Fostering Balanced Regional Development

• One-District One-Product (ODOP) initiative:
  • Promotes local products from each district
  • Provides a platform for farmers, artisans, and manufacturers
• Success depends on:
  • Capacity building initiatives
  • E-commerce platforms (including GeM)
  • Buyer-seller meets
  • Brand image and international marketing
  • District Export Hubs (DEHs)

Impact of Make in India

• Improved EoDB ranking (142 in 2014 to 63 in 2022)
• Increased gross FDI (average 2.2% to 2.6% of GDP)
• Highest ever annual FDI inflow (US $84.84 billion in 2022)
• Growth in agriculture sector (average 4.6% annually)
• Increased agricultural exports (US $50.2 billion in 2021-22)
• Increased employment in manufacturing sector (57 million in 2017-18 to 62.4 million in 2019-20)
• Growth in services exports (US $254.5 billion in 2021-22)

Conclusion

• Make in India has the potential to make India a global manufacturing hub.
• Continued efforts are needed for balanced regional growth, poverty reduction, and job creation.

 

India – Hub for Electronics Manufacturing

Government Initiatives

• Aims to boost manufacturing for domestic and international markets
• Subsidies to manufacturers to:
  • Increase exports
  • Reduce cheap imports
  • Create jobs
• Target: Increase electronics manufacturing capacity to Rs. 24 lakh crore by 2025-26 (create over 10 lakh jobs)

Early Signs of Success

• Mobile phone exports crossed $11 billion in 2022-23
• Increased value addition in electronics and smartphone manufacturing (PLI Scheme and PMP)
• Import substitution in telecom sector
• 7-fold jump in drone sector turnover due to PLI Scheme
• Electronics good exports increased from Rs. 39,978 crore in 2016-17 to Rs. 1,09,797 crore in 2021-22 (CAGR 22.39%)
• India’s share in global electronics manufacturing grew from 1.3% in 2012 to 3.75% in FY 21-22

Make in India Initiative

• PLI Scheme for LSEM: 4-6% incentive on incremental sales for mobile phone and electronic component manufacturing
• PLI for IT Hardware: 4-2%/1% incentive on net incremental sales of goods manufactured in India
• SPECS: 25% financial incentive on capital expenditure for electronic goods
• Modified EMC 2.0 Scheme: Support for world-class infrastructure to attract major manufacturers
• Programme for Development of Semiconductors and Display Manufacturing Ecosystem: Rs. 76,000 crore outlay

Fiscal Incentives

• Semiconductor Fabs: 50% fiscal support for setting up silicon-based fabs
• Display Fabs: 50% fiscal support for setting up TFT LCD/AMOLED fabs
• Compound Semiconductors/SiPh/Sensors Fabs: 50% fiscal support
• Design Linked Incentive Scheme: Financial incentives for semiconductor design

PLI Scheme 2.0 for IT Hardware

• Budgetary outlay of Rs. 17,000 crore to enhance manufacturing and exports
• 3 categories: global companies, hybrid companies, domestic companies
• Expected to:
  • Broaden manufacturing ecosystem
  • Localize components and sub-assemblies
  • Increase production (Rs. 3.35 lakh crore)
  • Attract investment (Rs. 2,430 crore)
  • Create jobs (75,000)

Challenges

• Infrastructure: Insufficient and poor-quality roads and ports
• Bureaucracy and complex taxation system
• Scarcity of skilled labor

Way Forward

• Increase manufacturing sector contribution to GDP (16% to 25% by 2025)
• Leverage domestic demand, government initiatives, and demographic edge

 

 

Cultural Heritage Tradition to Innovation

India’s Cultural Heritage

• Diverse tapestry shaped by thousands of years of history
• Soft power tool attracting tourists, scholars, and enthusiasts
• Yoga, music, dance, and traditional medicines garner international acclaim

Make in India and Cultural Heritage

• Opportunity to combine tradition and innovation
• Empowering and uplifting traditional artisans and craftsmen
• Initiatives:
  • Training in modern techniques, design, marketing, and e-commerce
  • Financial support through schemes like PMEGP
  • Trade fairs and online platforms like e-Haats
  • 150 rural handicrafts clusters for training and resources

Revitalising Traditional Art Forms

• Cultural renaissance for India’s art, crafts, and traditions
• Blending modern tools with traditional craftsmanship
• Examples:
  • National Handloom Day celebration
  • SF value chain promotion (Farm-to-Fiber, Fiber-to-Fabric, Fabric-to-Fashion, Fashion-to-Foreign)
  • Resurgence of pottery with innovative glazes and shapes

Leveraging Technology

• Digital replicas, high-resolution images, 3D scanning and printing for preservation
• Virtual museums and online exhibitions
• E-commerce platforms for direct consumer connection and fair prices

Cultural Tourism and Experiential Learning

• Make in India promoting cultural tourism:
  • Swadesh Darshan scheme for theme-based tourism circuits
  • Incredible India! campaign to highlight cultural heritage
  • Indian Council for Cultural Relations (ICCR)

Economic Impact

• Tourism promoting Indian art and culture globally
• Cultural diplomacy strengthened through cultural exchanges
• Showcasing artistic heritage to global audiences

Conclusion

• Make in India has potential to preserve and promote cultural identity
• Initiatives:
  • Integrating cultural elements into tourism
• Fostering artisanal growth through e-commerce
• Promoting cultural diplomacy
• Elevates global visibility of India’s rich heritage

 

 

Make in India’s Super Star Sectors and Water Management

Introduction

• Make in India initiative launched in September 2014
• Aims to promote India as a global manufacturing destination
• Relies on effective water use

Super Star Sectors

• Six sectors identified to boost Make in India:
  • Automotive
  • Electronics System Design and Manufacturing
  • Renewable Energy
  • Roads and Highways
  • Pharmaceuticals
  • Food Processing

Water Usage by Sector

• Automotive:
  • Uses 39,000 gallons of water per car
  • Requires sustainable water management practices
• Electronics:
  • Needs ultra-pure water in production
  • Uses 2,200 gallons of water per integrated circuit
  • Industry can innovate for water conservation
• Renewable Energy:
  • 1-5 million gallons of water used to clean a 100 MW solar plant
  • Green hydrogen production requires clean water
• Roads and Highways:
  • Network needs careful planning to consider water conservation
• Pharmaceuticals:
  • Requires high-quality pure water throughout manufacturing
  • 80% of top global pharmaceutical companies focus on water sustainability
• Food Processing:
  • Uses significant water in processing
  • UNFAO reports 70% of agricultural water goes to food production

Government Initiatives

• Simplified regulations for businesses
• Need for cautious approach on water and environment norms
• Circular use: encourages water reuse and recycling
• Water-neutral approach: optimizes processes to reduce water use

Conclusion

• Innovation and manufacturing should not lead to resource overuse
• Water conservation is crucial for Make in India’s success

 

  FDI: Changing Paradigm

FDI Explained

• Investment by foreign companies/individuals in a host country
• Boosts growth through resources, technology, jobs
• Promotes economic growth through:
  • Foreign market access
  • Capital, forex, technology

Impact on Manufacturing

• Brings new capital and technology
• Increases productivity and efficiency
• Creates jobs through new/expanded factories

Types of FDI

• Horizontal FDI:
  • Company expands to produce same goods in host country
  • Profitable due to lower costs (labor)
• Vertical FDI:
  • Acquires raw materials or distribution outlets
  • Makes production more cost-efficient

FDI in India

• Entry routes:
  • Automatic route: minimal approval needed
  • Government route: approval required for sensitive sectors
  • Mergers and Acquisitions: quick market entry
• Top investors (2022-23):
  • Mauritius (26%)
  • Singapore (23%)
  • USA (9%)
  • Netherlands (7%)
  • Japan (6%)
• Total FDI equity inflow (2022-23): $70.97 billion

Changes in FDI Policy

• Implemented to:
  • Promote investment
  • Ease business operations
  • Enhance economic growth
• Examples:
  • Single-Brand Retail Trading: 100% FDI allowed
  • Construction Sector: broader definition
  • Digital Media: 26% FDI for news/current affairs content
  • Civil Aviation: 100% FDI in airlines
  • Defence Sector: 74% FDI limit
  • Insurance Sector: 74% FDI limit

Make in India and FDI

• Objectives of Make in India:
  • Attract FDI for manufacturing base
  • Promote domestic industries and self-reliance
  • Increase employment
  • Foster innovation and technology
  • Enhance export competitiveness
• Impact of FDI on Manufacturing:
  • Manufacturing contributes 17.3% to GDP
  • Annual FDI inflows increasing
  • Manufacturing output rising (2019-2021)
  • Automobile industry:
    • Growth (2017-18 to 2018-19): 25.54%
    • FDI inflow (2021): $60 billion
    • Contributes 7% of GDP, employs 19 million
  • Textile sector:
    • FDI inflow (2017-2022): $1.52 billion
    • Contributes 4% of GDP, 14% of export earnings

Conclusion

• FDI plays a key role in emerging economies
• Bridges gap between capital and technology needs
• Drives economic growth

 

Food Processing: Advancing Make in India

Food Waste in India

• FAO estimates 40% of food production is wasted annually
• Causes: inefficient supply chain and fragmented food system
• Solution: strengthen food processing industry

Types of Food Processing

• Primary: basic cleaning, grading, packaging (fruits/vegetables)
• Secondary: alteration of product (milling paddy to rice)
• Tertiary: high value-added ready-to-eat food (bakery items)

Government Initiatives

• Pradhan Mantri Kisan Sampada Yojana (PMKSY)
  • Aims to develop modern food processing infrastructure
  • Creates infrastructure for efficient supply chain management
  • Approved projects:
    • 41 Mega Food Parks
    • 376 Cold Chain projects
    • 79 Agro-Processing Clusters
    • 489 proposals under CEFPPC
    • 183 Food Testing Labs
  • Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME)
    • Launched in June 2020
    • Aims to improve and formalize microenterprises in the unorganized food processing sector
    • Implemented in 35 states/UTs
    • Provides financial assistance for working capital and equipment
  • Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
    • Aims to boost domestic manufacturing and exports
    • Supports food manufacturers with incentives for expansion and branding
    • Targets emergence of strong Indian brands

Industry Growth

• Indian Food Processing market growing at 15.2% CAGR
• Estimated to reach $535 billion by 2025
• Food processing industry links farmers to domestic and international consumers

Key Statistics

• Retail segment contributes 70% of sales in India’s food and grocery market (world’s 6th largest)
• Indian gourmet food market valued at $1.3 billion (growing at 20% CAGR)
• India ranks:
  • 1st in global dairy production
  • 2nd in vegetable production
  • 2nd in cereal, fruit, and nut production
• Exports:
  • Processed food growing faster than unprocessed food
  • 46th in dairy exports
  • 15th in vegetable exports
  • 5th in cereal exports
  • 25th in fruit and nut exports

Government Support

• Food Processing designated as a Special Focus Sector in National Manufacturing Policy
• Mission Organic Value Chain Development in the North East Region (MOVCDNER) launched
  • Provides subsidies to farmers for organic inputs
• Goal to quadruple marine product exports to Rs. 1 lakh crore in 5 years
• Plans to build 10,000 new Farmer Producer Organizations (FPOs) to accelerate farm-gate processing

Conclusion

• Food processing industry is crucial for Make in India’s success
• Government initiatives aim to address food waste, improve infrastructure, and promote exports

 

Renewable Energy: Making India Self-Sufficient

India’s Energy Landscape

• Fastest-growing economy globally (5th largest)
• Reliant on fossil fuels (imports 80% of crude oil)
• 4th largest CO2 emitter
• Ambitious goals:
  • Cut carbon emissions by 1 billion ton by 2030
  • Achieve net-zero emissions by 2070

Renewable Energy Advantages

• Sustainable: clean, green, environmentally friendly
• Job creation: opportunities in new technologies
• Market assurance: reliable source of energy
• Power security: 24/7 power supply and sustainable transport

Government Initiatives

• Renewable energy targets:
  • 4th globally in installed capacity (including hydro)
  • 500 GW of non-fossil fuel energy by 2030 (COP26 pledge)
• Wind energy program: target of 60 GW by 2022
• FDI in renewables: $251 million in FY23 Q3 (top investors: Singapore, Mauritius, Netherlands, Japan)
• Reduced costs:
  • Solar power: 84% cheaper since 2010 (often cheaper than coal)
  • Wind power: 49% cheaper in the past decade
• Solar technology leadership:
  • World’s largest floating solar plant (Kerala)
  • World’s largest solar park (Pavagada Solar Park, Karnataka)
• Pradhan Mantri-Kisan Urja Suraksha evam Utthaan Mahabhiyan (PMKUSUM):
  • Launched in 2019 to provide solar energy benefits to farmers (30,800 MW target by 2023)

Other Key Steps

• 100% FDI allowed for renewable energy projects
• Waiver of interstate transmission charges for solar and wind power (until June 2025)
• Ultra Mega Renewable Energy Parks for streamlined project development
• Green Energy Corridor project: building new transmission lines for renewables
• Standard Bidding Guidelines for solar and wind power procurement
• Must-run status for solar and wind power
• Bio-CNG vehicles with 20% petrol blending
• Hydrogen fuel cell vehicles: future focus area
• Grid integration: key challenge (managing variable renewable energy sources)

Current Status and Challenges

• Installed renewable energy capacity: 174 GW (2023) – 37% of total energy supply
• Challenges:
  • Integrating renewables with the grid
  • Ensuring 24/7 power supply with storage solutions
  • Optimizing energy consumption in agriculture sector

The Road Ahead

• Renewable energy shift needs to become a mass movement
• Achieve energy security for sustained development
• Promote electric vehicles and hydrogen fuel cell vehicles
• Rectify agricultural subsidies for efficient energy consumption

 

Make in India and Youth

Challenges

• Share of manufacturing in GDP: 16%
• Rote learning in education system
• Lack of advanced technology, practical training in institutes
• Low investment in research and development
• Poor infrastructure, especially in rural areas
• Complexities in securing intellectual property rights
• Pressure for conventional careers
• Gender disparity

Government Initiatives

• NEP 2020: Aims to identify unique skills, promote creativity and critical thinking
• Atal Tinkering Labs (ATL): Established in 10,000 schools to foster curiosity and innovation in STEM fields
• New incubators for startups
• Mentor India initiative: Provides support from professionals
• Start-up India: Launched to create a startup-friendly ecosystem (increased startups from 452 in 2016 to 84,012 in 2022)
• State-level programs: Additional funding, incubators, skill development based on local needs

Conclusion

• Make in India aims to create jobs and increase manufacturing.
• Collaboration among stakeholders (government, industries, education) is crucial.
• Continued efforts are needed to make India a self-sufficient nation.