Introduction
Industrial policy plays a pivotal role in shaping a nation’s economic growth by promoting investment, boosting production, and generating employment. India, being one of the fastest-growing economies in the world, has adopted various industrial policies to accelerate its growth trajectory. The present industrial policy of the Government of India is focused on enhancing domestic manufacturing, promoting entrepreneurship, and attracting foreign investments. Two major flagship initiatives under this policy are ‘Make in India’ and ‘Stand Up India’, both of which aim to strengthen the industrial base, create employment, and promote inclusive development.
This article evaluates the present industrial policy of the Indian government with special reference to the ‘Make in India’ and ‘Stand Up India’ initiatives, analyzing their objectives, achievements, challenges, and their overall impact on the country’s economic development.
1. Overview of India’s Present Industrial Policy
India’s industrial policy has evolved significantly since its independence in 1947. The economic reforms of 1991 opened the doors to liberalization, privatization, and globalization, shifting the focus from a state-controlled economy to a market-driven one. In recent years, the government has launched new policies to further boost industrialization, infrastructure, and entrepreneurship.
Key Features of the Present Industrial Policy:
- Emphasis on Domestic Manufacturing: The government is encouraging indigenous production to reduce import dependence and boost local industries.
- Ease of Doing Business: Various reforms have been introduced to simplify regulations, reduce bureaucratic hurdles, and improve business efficiency.
- Foreign Direct Investment (FDI) Liberalization: Many sectors have been opened up for 100% FDI through automatic approval routes.
- Skill Development and Employment Generation: Programs have been launched to equip youth with the necessary skills to meet industry requirements.
- Technology and Innovation Support: The government is promoting research and development (R&D) and technological advancements in various sectors.
Two major flagship programs—‘Make in India’ and ‘Stand Up India’—have emerged as crucial elements of the industrial policy, targeting different but complementary aspects of the industrial ecosystem.
2. Make in India: Boosting Domestic Manufacturing
Introduction to Make in India
Launched in September 2014, ‘Make in India’ is a flagship initiative designed to transform India into a global manufacturing hub. The primary goal of this initiative is to encourage both domestic and international businesses to invest in India’s manufacturing sector, thereby reducing dependency on imports, creating employment, and enhancing exports.
Objectives of Make in India:
- Strengthening domestic manufacturing and increasing its contribution to GDP.
- Enhancing ease of doing business by cutting down on bureaucratic red tape.
- Attracting foreign direct investment (FDI) into key industrial sectors.
- Promoting self-reliance (Aatmanirbhar Bharat) in critical industries such as defense, electronics, and pharmaceuticals.
- Developing industrial corridors and smart cities to create world-class infrastructure.
Achievements of Make in India
- Rise in FDI Inflows
- Since the launch of ‘Make in India,’ India has witnessed record FDI inflows. FDI policies have been liberalized, allowing 100% FDI in key sectors such as defense, railways, and manufacturing.
- According to reports, India attracted over $500 billion in FDI between 2014 and 2023.
- Since the launch of ‘Make in India,’ India has witnessed record FDI inflows. FDI policies have been liberalized, allowing 100% FDI in key sectors such as defense, railways, and manufacturing.
- Growth in Manufacturing Sector
- The government has prioritized 25 sectors under ‘Make in India,’ including automobiles, textiles, pharmaceuticals, and electronics.
- India’s manufacturing sector has witnessed steady growth, with an increasing number of companies setting up production units within the country.
- The government has prioritized 25 sectors under ‘Make in India,’ including automobiles, textiles, pharmaceuticals, and electronics.
- Infrastructure Development
- Establishment of industrial corridors and improvement in logistics infrastructure.
- Introduction of Production Linked Incentive (PLI) schemes to incentivize local production in high-growth sectors.
- Establishment of industrial corridors and improvement in logistics infrastructure.
- Boost to Employment Generation
- ‘Make in India’ has led to the creation of millions of direct and indirect jobs.
- Increased industrialization has provided employment opportunities to the country’s growing workforce.
- ‘Make in India’ has led to the creation of millions of direct and indirect jobs.
- Success in Automobile and Electronics Industry
- India has become the fourth-largest automobile manufacturer globally.
- The mobile phone manufacturing industry in India has flourished, making India one of the largest mobile producers.
- India has become the fourth-largest automobile manufacturer globally.
Challenges of Make in India
- Infrastructure Gaps: Inadequate transport, logistics, and energy supply remain major roadblocks.
- Regulatory Bottlenecks: Although ‘Ease of Doing Business’ has improved, bureaucratic hurdles still persist.
- Skill Deficiency: There is a mismatch between industrial requirements and available workforce skills.
- Competition from Other Countries: Countries like China and Vietnam continue to dominate global manufacturing.
3. Stand Up India: Promoting Entrepreneurship Among Marginalized Sections
Introduction to Stand Up India
Launched in April 2016, ‘Stand Up India’ aims to promote entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing easy access to financial assistance for setting up businesses.
Objectives of Stand Up India
- To facilitate bank loans ranging from 10 lakh to 1 crore to at least one SC/ST borrower and one woman per bank branch.
- Encourage self-employment and job creation among underrepresented communities.
- Promote financial inclusion and bridge the credit gap for marginalized groups.
- Foster a culture of entrepreneurship and innovation among disadvantaged sections.
Achievements of Stand Up India
- Increased Financial Assistance to Entrepreneurs
- Over ₹40,000 crore in loans have been sanctioned under the scheme to SC/ST and women entrepreneurs.
- The scheme has supported the creation of thousands of micro and small enterprises.
- Over ₹40,000 crore in loans have been sanctioned under the scheme to SC/ST and women entrepreneurs.
- Boost to Women Entrepreneurs
- A significant proportion of beneficiaries under ‘Stand Up India’ have been women entrepreneurs.
- It has encouraged more women to participate in the formal economy and start their ventures.
- A significant proportion of beneficiaries under ‘Stand Up India’ have been women entrepreneurs.
- Encouraging Self-Reliance Among SC/ST Communities
- The scheme has provided business opportunities to people from marginalized backgrounds.
- It has led to the establishment of several startups in agriculture, retail, manufacturing, and service sectors.
- The scheme has provided business opportunities to people from marginalized backgrounds.
Challenges of Stand Up India
- Limited Awareness and Reach: Many potential beneficiaries, especially in rural areas, remain unaware of the scheme.
- Collateral Requirements: Some banks still require collateral, which makes it difficult for many to avail loans.
- Slow Disbursement of Loans: Bureaucratic delays in loan approval processes hinder the full potential of the scheme.
4. Overall Impact of Make in India and Stand Up India on Industrial Development
Positive Impact
- Economic Growth: Both schemes have contributed to GDP growth by strengthening the manufacturing and entrepreneurial ecosystem.
- Job Creation: ‘Make in India’ has created industrial jobs, while ‘Stand Up India’ has enabled self-employment.
- Reduced Import Dependency: The promotion of local industries has helped in reducing imports and saving foreign exchange.
Areas for Improvement
- Need for Policy Alignment: More synergy is required between industrial policies and labor laws.
- Strengthening Infrastructure: More investment in roads, ports, and electricity is essential for manufacturing growth.
- Enhancing Financial Accessibility: Easier loan procedures and financial literacy programs should be expanded.
Conclusion
The present industrial policy of the Indian government, with a strong focus on ‘Make in India’ and ‘Stand Up India,’ has played a transformative role in boosting domestic manufacturing, attracting foreign investment, and fostering entrepreneurship. While significant progress has been made, challenges such as infrastructure gaps, bureaucratic delays, and financial inclusion need to be addressed for these initiatives to achieve their full potential.
Moving forward, a balanced approach that combines industrial growth with inclusive policies will be crucial in making India a global economic powerhouse while ensuring equitable development for all sections of society.
