Indian manufacturing sector and the great transformation under Narendra Modi

In 2014, when Prime Minister Narendra Modi took the reins of our nation, India had been tagged as one of the so-called “Fragile Five” nations alongside Indonesia, Brazil, Turkey, and South Africa, that were headed for ‘economic collapse’. In 2022, India has emerged as the fastest growing economy among the large economies in the world. How India went from being labelled as one of the ‘Fragile Five’ to become ‘the bright spot’ on an otherwise dark horizon is the stuff that legends are made of. This is where we see the true impact of Pime Minister Modi’s leadership and vision, which has been instrumental in transforming our economy, and in turn our nation altogether. Since 1990s, India’s growth was mostly led by the services sector. However, the financial crisis of 2008 exemplified how fragile our economy could become, if we remained dependent on services sectors alone. Despite opportunities for course correction, the then UPA government did not do so, which eventually led to India being viewed as a fragile economy that could upend any day. In 2014, with Modi ji at the helm, our government sought to unleash the immense potential in the hitherto untapped manufacturing sector. Given our large domestic market with huge demand for all kinds of products, and the revenue potential from exports, an urgent need for the growth of manufacturing sector was felt. It is in this background that Prime Minister Modi initiated the “Make in India” campaign. ‘Make in India’ – Make for the World With a theme of ‘Make in India – Make for the World’ the Government of India sought to transform India into a global design and manufacturing hub. With a vision to encourage companies to design, develop, manufacture and assemble products in India, the government incentivised dedicated investments into manufacturing and envisioned the growth of the manufacturing sector to 25 per cent of GDP by 2025. To ensure ‘Make in India’ a success, our government has provided a supportive ecosystem through multiple policy initiatives such as the introduction of Goods and Service Tax, reduction in corporate tax, interventions to improve ease of doing business, FDI policy reforms were announced, measures for reduction in compliance burden, adoption of Public procurement orders, Phased Manufacturing Programme (PMP), AatamNirbhar Bharat package, indigenisation of the defence sector, introduction of Production Linked Incentives (PLI), development of the National Infrastructure Pipeline, National Monetization Pipeline, Industrial Corridor Development Programme – 11 Industrial Corridor are being developed in 4 phases. Furthermore, policies like Skill India, Digital India, Start-up India, and Accelerating Growth of New India’s Innovation (AGNII), are providing further impetus to manufacturing in India. Vision translated With the vision of transforming India into a manufacturing hub, our government under the leadership of Prime Minister Modi took concrete steps towards improving various business parameters that had remained a roadblock towards the growth of manufacturing sector in our economy. The stark improvement in India’s business rankings are a testament to the improving business environment in the country. India’s ‘Ease of Doing Business’ rank has improved dramatically from 142 in 2013-14 to 63 in 2020-21 (out of 190 economies). India’s ‘Trade Facilitation Ranking’ has seen a massive rise from 146th in 2018 to 68th in 2021, and in terms of ‘World Competitiveness Ranking’ India today stands at 37th (out of 63-nations) as compared to 43rd a year before. These supportive policy ecosystems for ‘Make in India’ continues to this day with the National Single Window System being launched in September 2021, PM Gati Shakti National Master Plan launched in October 2021, National logistics policy etc. Initiatives like Production Linked Incentive (PLI) scheme has been instrumental in attracting investments into the 14 core sectors – including automobiles, auto components, drone and drone components, telecom and networking, electronics, IT hardware, white goods, pharma, textiles, food products, high efficiency solar PV modules, advance chemistry cell and specialty steel. Impacts Thanks to these conducive policy interventions, economic transparency, and improved business environment today, some of the biggest companies in the world, including but not limited to Toshiba, Boeing, Samsung, Apple, General Electric, Siemens, HTC are setting up manufacturing plants in India. This is the direct outcome of the “Make in India” policy introduced by Prime Minister Modi. Though we have seen drastic improvements in all sectors, I am highlighting some major transformations witnessed in manufacturing, sector wise: Defence sector Thanks to ‘Make in India’ and “Aatmanirbhar Bharat’ initiatives, expenditure on defence procurement from foreign sources has reduced from 46 per cent to 35 per cent in last four years, and defence exports have grown by 334 per cent in last five years. India is now exporting to over 75 countries due to collaborative efforts, and the value of production of public and private sectors defence companies have increased from ₹79,100 crore to ₹84,700 crore in last two years i.e. 2019-20 to 2020-21. The success of ‘Make in India’ initiative on defence sector can be adjudged from the fact that while in 2013-14 we only exported ₹900 crore worth of defence products, in 2021-22 this figure rose to ₹14000 crore – an unprecedented increase of 1555 per cent under Modi. Automobile sector India’s automotive industry is worth more than US$100 billion and contributes around 8% of country’s total export. Our automobile industry is set to become the 3rd largest in the world by 2025. It is a matter of great pride for every Indian that India is today the largest manufacturer of two-wheeler, three-wheelers and tractors, fourth largest manufacturer of commercial vehicles, and the fifth largest manufacturer of passenger cars in the world. Export of total number of automobiles increased from 4,134,047 in 2020-21 to 5,617,246 in 2021-22, registering a positive growth of 35.9 per cent year-on-year (YoY). Export of Passenger vehicles including cars increased from 404,397 in 2020-21 to 577,875 in 2021-22, registering a positive growth of 42.9%. In terms of automobile components sector, India’s auto components industry has for the first time recorded a trade surplus of US$ 600 million in the current Financial Year. BioEconomy India’s biotech industry that cover key sectors like pharmaceuticals, agriculture, bio-industry, bio-IT, and bio-services etc and has emerged as India’s ‘sunrise sector’. It is to the credit of the visionary leadership of PM Modi ji that in the past eight-years, India’s BioEconomy has grown by eight fold from US$ 10billion to over US$ 80billion. Our government has envisioned the growth in the BioEconomy to touch US$ 150billion threshold by 2025. Biotech Start-ups have grown 100 times in the last eight years from 52 odd startups in 2014 to 5,300 plus in 2022, and investment in bio-economy has risen from a paltry ₹10 crore in 2014 to ₹4200 crore in 2022. IT & BPM Sector Thanks to the visionary leadership of Prrime Minister Modi, with initiatives like ‘Digital India’ our government has been able to unleash the latent talent that the youths of our nation carried, and nowhere is this more apparent in the transformation our nation has undergone in terms of Information Technology and Business Process Management (IT & BPM) sector. According to the recently released Network Readiness Index 2022 released in November, India has secured 1st rank in “AI talent concentration”, the second rank in “Mobile broadband internet traffic within the country and International Internet bandwidth”, third rank in “Annual investment in telecommunication services and Domestic market size”, fourth rank in “ICT Services exports”, fifth rank in “FTTH and Building Internet subscriptions and AI scientific publications”. Our overall ranking has today improved by six places to 61st rank (out of 131 economies) as compared to last year. India has today emerged as the second largest manufacturer of mobile handsets in the world in volume terms. In 2014-15 we produced only 6 crore handsets, which has increased to 30 crore handsets in 2020-21. The number of telecom base stations in the country has grown substantially to 23.35 lakhs in February, 2022 from 6.49 lakhs in March 2014. As on 31 December 2021, the mobile networks in India are serving more than 115 crore subscribers, and nearly, 98 per cent of the population is covered with 4G network. Internet users have today increased to 80 crores from six crore in 2014, and Optical Fibre Coverage has increased from 100 panchayats in 2014 to 1.7 lakh panchayats in 2022. The IT-BPM industry is the largest private sector employer, delivering around 4.14 million jobs. The industry accounts for more than 45 per cent share in total services export from India. MSME sector In the past eight-years our nation has witnessed major growth of Micro, Small and Medium Enterprises (MSMEs sectors. India has a large 7.9 million registered MSME base, and contributes 33% of the GDP and generates over 12 crore jobs. MSMEs enable the inclusion of generally neglected entrepreneurs – women, marginal entrepreneurs, and substantially contributes towards wealth creation at the grassroots level. In FY22 alone, 8.59 lakh women-led MSMEs got registered on Udyam portal which is 17% of the total MSME registration. As many as 63.4 million units contribute 6.11% of the manufacturing GDP and 24.63 per cent of services GDP. To facilitate MSMEs further, the Ministry of Micro, Small & Medium Industries in India has allowed for registration of a business free online (MSME), and this has boosted registration of MSME sectors. Forward march Every manufacturing sector has seen dynamic growth in the past eight-years, and I am certain that this forward march of Indian economy will increase pace substantially, as more reforms and market friendly initiatives are unleashed by the government. Initiatives like the National Single Window System (NSWS) will become a game changer. Since its launch, 27 central government departments and 19 States/Union Territories, including Andhra Pradesh, Bihar, Goa, Gujarat, Himachal Pradesh, Jammu and Kashmir, have integrated into the National Single Window System, and more states are eventually expected to join in. As India moves rapidly towards becoming a $5 trillion economy, I feel there is immense potential and possibilities in manufacturing sector for every Indian to tap into. With a visionary leader Modi at the helm of our nation, I am confident this inclusionary process will help ensure the transformation of India from ‘a developing’ to ‘the developed nation’ in the next 10 years. The writer is the Member of Parliament from Darjeeling, and national spokesperson for BJP. Views are personal. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.