Saturday 23 August 2014

MAKE IN INDIA

Come, make in India, the new Prime Minster Shri Narendra Modi exhorted the world in his maiden Independence Day address from the Rad Fort of Delhi. Be it plastics or cars or satellites or agricultural products, come make in India". "We should dream of 'Made in India' products across the world. He is inviting multinational firms to set up manufacturing bases as part of his biggest push to fix in one go multiple economic problems including low employment generation, slow GDP growth, high inflation rate and high trade deficit. He emphasized that it is need to encourage the manufacturing and to channelize the strength of the youth through manufacturing.

The revival of manufacturing is the biggest challenge for the new government as the high inflation has kept interest rates high, impacting investments and demand. The first time since 1991-92 economic growth is the lowest in a decade, industrial growth has frozen and job growth has dried up. Meanwhile, infrastructure development has slowed and the fiscal deficit hangs like Damocles' Sword. There are a number of challenges which the economy is facing in the realms of basic necessities of life.

India's manufacturing activity contracted 0.7 per cent in 2013-14. Imports of the country is increasing year by year and averaged 5921.34 USD Million from 1957 until 2014, reached an all-time high of 45281.90 USD Million in May of 2011 and a record low of 117.40 USD Million in August of 1958. The country is heavily dependent on coal and foreign oil imports for its energy needs, machinery, gems, fertilizers and chemicals.

Exports in India is also increasing and averaged 4042.16 USD Million from 1957 until 2014, reaching an all-time high of 30541.44 USD Million in March of 2013 and a record low of 59.01 USD Million in June of 1958.  India’s main exports are engineering goods, gems and Jewelry, chemicals, agricultural products textiles and services. India is also one of Asia’s largest refined product exporters with petroleum. 

India recorded a trade deficit of 12228.60 USD Million in July of 2014 and Balance of Trade averaged -1879.18 USD Million from 1957 until 2014, reached an all-time high of 258.90 USD Million in March of 1977 and a record low of -20210.90 USD Million in October of 2012. The country had been recording sustained trade deficits due to low exports base and high imports of coal and oil for its energy needs.

He exhorting industry to Make India the manufacturing hub of the world will mean higher exports from the country and lower imports, reducing the trade gap. The 'Make in India' and 'Made in India' vision will be supported by requisite policy and implementation measures for enhancing the competitiveness of our manufacturing sector. We should strive to be a nation that does not import, but exports. The youth of the country should neither depend upon imported products nor compromise with the quality of product.

Modi's speech is visionary and path-breaking because manufacturing is necessary for employment and for trade expansion. In order to achieve this, the government would need to address issues such as reforms in taxation policy, including introduction of the GST, land acquisition, faster approvals, trade policy, etc.

It is a welcome sign to promote more engagement between the States & foreign countries in relevant fields. This initiative of the centre will provide for better federal structure and good initiatives by the concerned states. Our missions now will be required to pay much attention to trade and commerce beside usual political relationships between nations. It is one of the best ways to contribute by individual state and people to develop their nation.

Modi is right to invite MNCs to manufacture in India so that the countrymen can have employment using their skills. The similar message he has given from the rampart of the Red Fort on Independence Day. Hope this will keep going in positive direction. Wish you all the best wishes!

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