‘Make in India’ Campaign – How Far It Can Boost Employment in India

India claimed and proved that it can reach Mars at a less cost per kilometer than the Auto fares it has in its metro cities! Cherishing this success, Prime Minister Mr. Narendra Modi has invited foreign direct investment in manufacturing to boost the employment scope in India. He named the campaign as ‘Make In India’ and also takes the FDI in two ways - for common man as “First Develop India” and Foreign Direct Investment for the investors. Now the biggest question is how far it is possible to generate employment through manufacturing industry when it currently contributes only 16% of the national GDP.

How to fulfill employment expectation of 12 million youth while 2 million jobs are available?

Some questions are always easy to ask – how to fulfill employment expectation of 12 million youth while 2 million jobs are available? It is fact that Gross domestic product (GDP) growth stalled below 5% in 2013. How is going to be his claim when he wants a movement away from poverty will come from increase in employment? Will it be really possible to generate employment by developing the manufacturing sector in India?

 

Dignitaries assuring contribution and upholding concerns

Dignitaries present at the launch of Make In India Campaign had their share of thoughts that arise hope. Ms. Chanda Kochchar, MD & CEO, ICICI Bank says Make in India is the next growth driver for India and it is capable to add 9 crore jobs in the coming decade through Manufacturing sector. Thanks to Mr. Mukesh Ambani, Chairman & Managing Director for Reliance Industries to give some touch of reality when he said this 'Make in India' is a historic approach for the Indian manufacturing industry aiming at the present and future, not about the past. And Reliance will create 1.25 lakh jobs in next 12-15 months.

Mr. Modi wants to create employment for Indians who are in workable-age between 15 and 54 years. However, Kenichi Ayukawa, MD and CEO, Maruti Suzuki India identifies how he is still concerned about government not involving in removing factors affecting manufacturing competitiveness. Same thing reflects in World Bank’s Ease of Doing Business index where India ranked 142 (worse than its 2014 rank of 140) out of 189 countries.

Logic behind faster people are pulled out of poverty, the more opportunity will there be for global business

There is logic behind Mr. Modi’s claim that employment generation is beneficial for the investors as: “The faster people are pulled out of poverty and brought into the middle class, the more opportunity will there be for global business. Therefore, investors from abroad need to create jobs. Cost effective manufacturing and a handsome buyer - one who has purchasing power - are both required. More employment means more purchasing power.”

Balancing Make for India and Make in India

RBI Governor Raghuram Rajan has given a different shade of light for the growth story of India. He said, for "Make in India" to succeed, the government needs to implement ambitious infrastructure plans and reduce the cost of doing business in India. He reminded that "Make for India" is equally important because external demand is weak. He also adds that India does not need to go out of the way to get foreign investors: "If we make it easier for young companies to do business in India, it will create a transparent and quick system and will do the same for foreign investors…" He also points out, FDI and globalization bring benefits but these can also affect adversely by vanishing some routine jobs as has been seen for the middle class in US and Europe.

Statistics show slowdown trend in manufacturing Industry

The vanishing theory in jobs is in other way applicable in India if we take things in different way. A recent report released by the Ministry of Statistics and Program Implementation on Indian factories shows that more than 400,000 people lost their jobs during the financial year 2012-13. This slowdown points out to a trend in manufacturing Industry that is moving towards automating and squeezing more output from its workers. It is confirming that fewer number of workers would be required for manufacturing units. Now if this is the scenario for running investment, what about the bigger foreign direct investments that would certainly aim at more profits with automation and implementation of technological advancement. How is then going to be the number of employment through Make In India based manufacturing unites?

How to contribute 25% of the GDP while the current maximum level of 16% of GDP

The reality can be harsh but true when we see Annual Survey of Industries (ASI) reporting that India had 222,120 operational industrial units during 2012-13 and there is an increase of 2% per cent from 217,554 units in 2011-2012 but people engaged in factories declined from 13.43 million to 12.95 million notifying a drop of 3.6% (480,000). Now how Mr. Modi can claim that Make-In-India program can boost employment through manufacturing units and it would contribute at least 25% of GDP from the current maximum level of 16% of GDP!

Add to this statistics is political situation that has already hindered the growth of employment as some ‘states with more inflexible labor regulations have witnessed slower growth in employment in manufacturing than states with more flexible labor market regulations,” – this also comes from the same study of ASI.

Pray that benefits reach to people via ‘minimum government and maximum governance.’

Well, there are limitations amidst the expectations. Any dream can comes true when actions are taken. Make In India campaign is going to generate employment for sure while its results may or may not be as per expectations! Whatever it be, all the moves in generating employment is ever welcome. It is a matter of good hope that the Government has also thought about Indian entrepreneurship-led economic growth to act as catalyst to boost employment. The RS 10,000-crore fund for start-ups announced by the government is a welcome step for entrepreneurs and SMEs to set up manufacturing unites. Let’s prey that its benefits reach to people who need them via ‘minimum government and maximum governance.’

Let both foreign and domestic manufacturing industry create enormous employment opportunities for our country. Let everything work for good to Indian citizens. We have already accepted ‘Made for India’ and ‘made in India’. We welcome investors and industrialists to ‘Make In India.’