A number of issues of Business Economics have covered the ‘Make in India’ initiative, since 2014 which is a unique and excellent concept undertaken by our honourable Prime Minister, Shri Narendra Modi. We, the children of Bharat Mata, need to work hard with righteousness, boldness, selflessness, and with cooperative spirit to generate wealth for the welfare of all citizens. We must take upon ourselves the responsibility to protect Mother Earth.
The purpose is to ‛Make in India, Use in India, Export from India’. This spirit, however, has not permeated over the country. As a result, manufacturing and service industries have not grown up. The unemployment rate has increased. The products made in India are not globally competitivedue to multiple reasons, which are known to the government, if not, then should be known from the public.
Narendra Modi has been making untiring efforts to resolve all problems, which are deep-rooted and politicised. In China, the manufacturing sectorcontributes 35% of its GDP compared to 17% in India. The sector is in the grip of different policies and procedures of states. High rates of interests, complicated labour laws, retrospective tax law and multiple taxes, poor infrastructure, poor productivity, lack of innovations, global cut-throat competition, fear psychosis, no god-father/saviour in the event of failure, excess internal and external factors, liquidity crunch, currency depreciation, global financial crisis, and domestic regulatory issues prevent industries and manufacturing units from functioning smoothly.
Mahatma Gandhi had launched the Swadeshi Movement to counter foreign products, which were harming local enterprises, cottage industries and small scale industries. What are the features and measures of the current policy of India to overcome dumping of foreign products? Due to this, industries (large, medium and small) have been shut down and are caught in the bankruptcy laws. The investment is the lowest in the last three years. Indian promoters and entrepreneurs are losing their industries to foreign players. Foreign investment has penetrated in all the sectors. A hundred percent FDI is permitted in 25 sectors, except for space (74%), defence (49%) and news media (26%).
Purchase policy of the government for defence and
other sectors are very complicated. Registration for bidding is very difficult, specification of such suit only the foreign suppliers.
The way we are marching forward, it appears to be difficult to make the ‘Make in India’ initiative a success. A committee should be formed comprising equally of bureaucrats, politicians, industrialists, and large/medium/small cottage industries to investigate the sector-wise reason for not succeeding. The American government is the world’s biggest debtor. The government’s debt exceeds 250% of the economic output. India’s debt also exceeds 125% of the economic output. Debt includes that of the government, the households and non-financial corporate bodies. Has the country created matching assets for the debt? All the debt is for consumption. The average debt to capital issue is rising.
There are different forecasts as to the growth of Indian economy. The UNO reported that the Indian economy will grow 7.2%in 2018 and 7.4% in 2019 as a result of private consumption, public investment and structural reform. But it still faces the risk of sudden capital withdrawal on account of monetary policy normalisation. It reports that inflation in India will be 4.5% in 2018 and 4.8% in 2019. However, there is a subdued credit growth and low capital utilisation. Stephen Stigler, Ernest DeWitt Burton, distinguished Service Professor and Chair of the Department of statistics at the University of Chicago, said that India has changed dramatically. But some parts of the country has not been changing in the same way.
The General Statistics Office (GSO) predicted that India's economic growth will hit a 4-year trough of 6.5%. FY 18 GDP projection for India is IMF-6.7%. The World Bank stands at 7%, the RBI at 6.7% and Economic Survey at 6.75-7.5%.
The ropes around the neck of the businessmen have to be loosened, and common people at large need to perform with ease. Drive for more and more revenue hitting the pockets of common men will not yield results.
The stock market is bullish. Many experts feel that 2018 holds good news for the market. Money is chasing the stocks. Expectation is high. Sooner or later shall the industry perform a miracle. There is no other venue to invest the money except stock market, mutual funds, bonds and the likes. However, funds may flow to buy the stressed assets.
May God bless the nation and its people to work hard selflessly and fearlessly, with devotion and integrity. The politicians and authorities needto take pragmatic action and not populist measures for the growth of the nation and for the welfare of the people. May our country be blessed by the almighty and may we continue to pursue holistic growth that will translate into the well-being of all sections of the society.
Dr. H.P. Kanoria
Editor in chief
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