Transcript Make In India

MAKE IN INDIA
Make in India programme was launched by Mr. PM Modi in
2014to encourage the country to invest in the manufacturing
sector in India .
The slogan coined by PM Modi was ‘zero defect ,zero
effect’,which means product which is created by
manufacturing companies with zero or no effect and the
process which is used for production and product is zero
effect on the environment and ecological environment.
The objective of this mega program is to ensure that the
manufacturing countries which contributes around 15% if the
country GDP is increased to 25% in next coming years.
The government by their programme expects to generate
jobs , attract much foreign direct investment transfer India to
a manufacturing hub preferred by around the glode .
It is natio0nwide campaign to boost domestic manufacturing.
MAJOR OBJECTIVES
The major objective behind this programmes is to focus
upon the heavy industries , public enterprises which
generating employment in India.
The programme is launched to facilitate investment.
To Foster innovation.
To enhance skill development.
To protect intlectual property.
To build best in class manufacturing infrastructure.
SECTOR IN FOCUS
• AUTOMOBILES
• AUTOMOBILES
COMPONENTS
• AVIATION
• BIOTECHNOLOGY
• CHEMICALS
• DEFENCE
MANUFACTURING
• OIL AND GAS
• ELECTRICAL
MACHINERY
• ELECTONIC SYSTEM
• FOOD PROCESSING
• INFORMATION
TECHNOLOGY
• LEATHER
• MEDIA AND
ENTERTAINMENT
• MINING
STRENGTH OF INDIA
MANUFACTURING
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INDIA HAS ALREADY MARKED ITS PRESENCE AS ONE OF THE
FASTEST GROWING ECONOMICS OF THE WORLD.
THE COUNTRY IS EXPECTED TO RANK AMONGST THE WORLD’S
TOP THREE GROWTH ECONOMICS AND AMONGST THE TOP
THREE MANUFACTURING DESTINATION BY 2020.
THE COST OF MANPOWER IS RELATIVELY LOW AS COMPARED
TO OTHER COUNTRIES.
RESPONSIBLE BUSSINESS HOUSES ARE OPRATING WITH
CREDIBILITY AND PROFESSIONALISM.
THERE IS A PRESENCE OF STRONG CONSUMERISM IN THE
DOMESTIC MARKET
STRONG TECHNICAL AND ENGINEERING CAPABILITIES BACKED
BY TOP NOTCH SCIENTIFIC AND TECHINICAL INSTITUTES ARE
AVAILABLE
THERE ARE WELL REGULATED AND STABLE FINANCIAL MARKET
WHICH ARE AVAILABLE TO FOREIGNER INVESTOR
HOW IS INDIA PLACED ON
MANUFACTURING FRONT?
Though in the recent past year ,the growth of the
manufacturing sector has generally outpaced the
over all growth rate of the economy at just over 16
percent of the GDP, the contribution of
manufacturing in india is much below its potncial
development of indian manufacturing sector calls
for depening and recalibratinh of economic forms
that would strengths the sector and it grow faster.
SECTOR SUPPORTING
MANUFACTURING IN
INDIA
• Power sector to provide constant supply to run
manufacturing units.
• Road and transport infrastructure for a specific
movement of raw materials and finished good.
• Research and development to innovate product
design.
• Training and development to fuel a constant
supply of skilled manpower.
INDUSTRIES TO BE
GIVEN SPECIAL
ATTENTION
• EMPLOYMENT UNTENSIVE INDUSTRIES: Adequate support will
be given to promote and strengthen employment introduce
industries to ensure job creation
• CAPITAL GOODS: The capital goods industry is the mother
industry for manufacturing but has not grown as the desired
pace. A special focus to be given to machines tools, heavy
industries, heavy transport and mining equipment
• RESEARCH AND DEVELOPMENT: Time based programmes will
be initiated to building strong capabilities with R&D facilities
and also to encourage the growth an development.
• INDUSTRIES WITH SPECIAL SIGNIFICANCE: A strategic
requirement of the country would warrant the launch of the
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INDUSTRIES WHERE INDIA ENJOYS A COMPETITIVE ADVANTAGE:
India
is a large domestic market coupled with a strong
engineering base has created indigeneous expertise and
cost effective manufacturing in automobiles
,pharmaceuticals and medical equipment.The concerned
ministries will be formulating special programme to
consolidate strong industry base to retain the global
leadership.
SMALL AND MEDIUM ENTERPRISES: The SME sector contributes
about 45% to the manufacturing output,40% of the total
exports and offers employment opportunities both for self
employment and jobs,across diverse geographic. A healthy
rate of growth shall be ensured for the over all growth of
the manufacturing sector.
PUBLIC SECTOR ENTERPRISES: Public sector enterprises
,especially those in defence and energy sectors continues
to plat a major role in the growth of manufacturing as well
as of the nation economy . A suitable policy framework will
be formulated in this regard to make PSUs competitive
while ensuring functional autonomy.
Policy Measures
The government is positive about the program and is
aligning its goals to further its mission.Following are
some of the policy measures in this regard :
• 100% FDI has been allowed in medical devices,
telecom sector & single brand retail.
• FDI cap has been increased in insurance from 26% to
49%.
• 49% FDI in Petroleum Refining by PSUs.
• Satellites- establishment and operation
(74%),commodity exchanges(49%),power
exchanges(49)%.
• FDI in commodity exchanges, stock exchanges and
depositories, power exchanges, courier services under
the government route has now been brought under the
automatic route.
• Restriction in tea plantation sector has been removed.
• FDI limit has been raised to 74% in credit information &
100% in asset reconstruction companies.
• Construction, operation & maintenance of railway sector
have been opened to 100% FDI under automatic route.
Government Incentives
The central government & state governments provides
a number of incentives. some of the incentives are as
follows:
Central Government Incentives
(a)Investment allowance at the rate of 15% to
manufacturing companies that invest more than 1
billion in plant & machinery available till to
31.3.2015.
(b)Incentives to units set-up in SEZ.NIMZ.
(c)Exports incentives like duty drawback, duty
exemption, focus products& market schemes.
(d)Sector specific incentives like M-SIPS in electronics.
State Government Incentives
The incentives differ from state to state and are
generally laid down in each states’ industrial policy.
The broad categories of state incentives include:
(a)Stamp duty exemption for land acquisition
(b)Refund of VAT
(c)Exemption from payment of electricity duty etc,.
NATIONAL INVESTMENT &
MANUFACTURING ZONES(NIMZ)
These are being conceived as giant industrial greenfield
townships to promote world-class manufacturing
activities.The central govt. will be responsible for
bearing the cost of master planning,improving external
infrastructure linkages including rail,road,ports,telecom
etc.The identification of land will be undertaken be
state government.
The state government will also play a role in its
acquisition if necessary.
There are some direct & indirect financial benefits for
making Make In India a reality.
1.Transfer of Assets
•In case a unit declared sick, the transfer of assets will
be facilitated by the company managing the affairs of
NIMZ.
•Relief from capital gains tax on the sale of plant &
machinery of a unit located in NIMZ will be granted in
case of re-investment of sale consideration within a
period of 3 years.
2.Green Technology and Practices
• A grant of 25% to SMEs for expenditure incurred on
audit subject to a maximum of Rs1,00,000.
• A 10% one-time capital subsidy for unit practicing
zero water discharge.
• A rebate on water cess for setting up wastewater
recycling facilities.
3.Technology Development
• Incentives for the production of machines for
controlling pollution, reducing energy consumption
etc.
• SMEs will be given access part of reimbursement of
technology acquisition costs up to a maximum of
Rs.2,00,000 for the purpose of acquiring appropriate
technologies up to maximum 5 years.
4.Special Benefits to SMEs
• Rollover relief from long term capital gains tax to
individual on sale of plant & machinery.
• Liberalization of RBI norms for banks investing in
venture capitals funds with a focus on SMEs ,in
consultation of RBI.
• The inclusion of lending to SMEs in manufacturing as
part of priority sector lending.
5.Government Procurement
• The policy will also consider use of public procurement
with stipulation of local value addition in specified
sectors.These include areas of critical techonologies such
as solar energy equipments, electronics hardware,fuel
efficient transport, it based security
system,power,roads& highways etc.
6.Industrial Training & Skill Upgradation Measures
• The creation of a multiple tier structure for skill
development, namely:
1.Skill-building among large numbers of a minimally
educated workforce.
2.Relevent vocational & skill training through
establishment of ITI in PPP mode.
3.Specialised skill development through the
establishment of polytechnics.
3.Establishment of instructors’training centre in each
NIMZ.
7.Exit Mechanism
•It envisages an alternate exit mechanism through job
loss policy and a sinking fund or a combination of both.
CONTRIBUTION OF FINANCIAL
SECTOR TO BOOST MANUFACTURING
BASE
Organized financial sector has been a strong contribution
of credit to MSME sector with 32% of the total lending
going to this sector in the year 2011.
THE MSME MARKET
There are about 30 million MSMEs in India which contributes upto 8%
towards India's GDP, 45% of the total manufacturing output,
employing over 60 million. GDP has been steadily growing over the
years
The govt. has also planned to locally manufacture 181 products at a cost of US$ 18.1
billion. This is also boosting the infrastructure sector such as gas, oil, power etc.
Separate set of labour laws has been made to govern MSMEs. The proposed new
labour laws will be applicable to industrial units that employee 40 or less in their
workforce.
LACK OF ADQUETE FINANCE IS ONE OF THE BIGGEST CHALLENGES FACED BY MSME
SECTOR.
Financial institutions have limited their exposure to the sector due to a higher risk
perception .
NPA (non-performing assets ) LEVEL AS A
MOJOR CHALLENGE FACED BY FINANCIAL
INSTITUTIONS
The major challenge faced by financial institutions by lending to
MSME sector is to maintain NPA level . High NPA level in specific
sector results in avoiding the lending by the financial institutions
to the Micro Small And Medium Enterprise sector.
FOLLOWING ARE THE REASONS FOR HIGH NPA LEVEL:
1). Non availability of risk rating tools.
2). Govt. interference in doling loans.
RECOMNDATIONS TO MAKE
‘MAKE IN INDIA’ A SUCCESS
1.Efficient administrative machinery .
2.Bureaucrats need to change.
3.Need of educated workforce of thinkers.
4.Address issues of taxations, trait policy,
land acquisition etc. .
5.Strong partnership between govt. and
private sector.
CHALLENGES
The governments Make In India Campaign has till early
October, 2014 attracted two thousand crores worth
investment proposal.
The following are the critics faced by this campaign:
1. The labour reform and policies have not been implemented properly.
2. India's ailing infrastructure facilities make it difficult to make a
manufacturing hub.
3. Widespread corruption is one of the challenges.
4. Delay in getting regulatory clearances lead to rise in cost of
production.