Four years into his five year term, the earlier-deficits are lower, business has declined, the contribution of the manufacturing sector to GDP is barely 16%, progress in improving the country’s inadequate roads, rail lines and ports has been slow and the job creation rate has fallen.
Only 641,000 jobs created during 2014 and December 2016, which means only one million people, joined jobs every month.
Demonetization is one of the biggest reason make in India could not succeed. It severely backs the manufacturing sector. Sales decreased 19% during December in automobile sector which is the biggest fall in past 16 years. FMCG products sale declined to 40-50%, the biggest economic sector, informal sector sales hit by 80%. Many small scaled industries had to shut which created unemployment.
“Initially, the Make In India program was mainly focused on defense production, but little has happened there. The local production of big ticket items eludes us. Even as he was announcing this, PM Modi ordered ready to fly Rafale jets in France,” says Mohan Guruswamy, chairman of Centre for Policy Alternatives Society.
The foreign investment flow has also been disturbed. The government has failed to encourage foreign companies to manufacture in India by liberalizing foreign direct Investment (FDI) policies. “So far there are no clear indications as to whether Make in India has made a perceptible impact on the manufacturing sector. According to the revised index of industrial production, the manufacturing sector’s annual average growth rate after 2014-15 is less than 4%. In exports as well, the picture is not rosy. In 2016-17 manufactured exports, including petroleum increased 5% but this should be seen in the backdrop of a steep fall in oil prices in the previous year. The average annual growth rate during the last two years also remains negative,” says K.S. Chalapati Rao, co-author of the ISID report and a Distinguished Fellow at the ISID.
Data on IIP has the same conclusion. In May 2014, the index was 183.5, in August 2015 it was 184. 8, in March 2016 it was 208.1 and in February 2017 it had fallen to 190.1.
Growth of small scale industries have declined since then.
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