Make in India: Leveraging electronics manufacturing:
Week 14-21 Feb,2016
● The nation’s transition in manufacturing, from the fettered times of the Licence Raj to the more recent one of global competitiveness, has been noteworthy.
● Demographic dividend, a term bandied around freely, is the country’s real strength.
● Hundreds of millions of young people constitute over 60% of the population who, if imparted the right training, can hold their own against global challenges in terms of expertise or skills, paired with the inherent advantage of labour arbitrage.
● Towards meeting this goal, NSDP had set an ambitious target of skilling 500 million Indians by 2022. Admittedly, the present annual capacity of skill development programmes is woefully small—3 million or thereabouts. With 1.5 million engineers passing out annually, a significant proportion of who face employability issues, manufacturing in its latest avatar could provide a viable opportunity.
● Daunting as the challenge may be, the silver lining could well be the country’s pool of scientists, the third largest in the world.
● The vision of Make-in-India eloquently articulated by the prime minister time and again, rests on 3Ds—democracy, demography and demand. Skilled labour, a robust legal framework which protects IPR and a strong commitment towards calibrated liberalisation provide a strong framework for attracting global investors.
● Among the 25 sectors identified, a few like IT BPM, electronic systems, automobile have already forged ahead to stay globally competitive, provide high-end products and services, and sustain their position in the growth curve.
Steps taken by the government to make ‘Make in India’ a reality:
● The Indian landscape in almost every state is dotted with industrial parks, SEZs and sector-specific clusters. In addition, country-specific zones provide assistance and support for setting up shop.
● Towards building adequate infrastructure—a precursor to any form of manufacturing activity—the government’s efforts to build various corridors have been significant—Delhi-Mumbai Freight Corridor (DFC), Bengaluru-Mumbai Economic Corridor, among others.
● The Ease of Doing Business Index, often cited as the economy’s Achilles heel, has shown some positive movement as well.
● DIPP, by leveraging its broader mandate, has advised ministries and state governments to simplify and rationalise the regulatory environment, and enable the online e-biz portals to provide genuine single window clearance.
● Government policies of providing special incentives, customs duty relaxation for certain components, setting up electronic clusters, introducing minimum local/MSME sourcing norm for government procurement, skill development, harnessing the available R&D capabilities and supporting the setting up of Centres of Excellence, have all been positive factors.
● Investments seen from countries like the US, South Korea, China and Japan, provide encouragement for others to follow suit.
Conclusion:
● The steps taken by the government to make India a favourable destination to do business in, while partial in scope, are creditworthy. This industry is not constrained by demand. If at all, the challenge will be on the supply side. If the country is able to provide the right talent (both quality and quantity), infrastructure, incentives and effective legal framework, who can predict what miracles the manufacturing sector may yet accomplish in the future—and how it contributes to India’s positioning on the global growth map.