The Unmaking Of Make In India
Where do we stand one year before the ‘Make in India’ deadline of making manufacturing 25% of the economy and 100 million jobs?
So where do we stand one year before our deadline? In a very dismal place, and not only because of the Covid-19 pandemic.
Rather than adding 100 million manufacturing jobs, India lost 24 million jobs between 2016-17 and 2020-21, according to a recent analysis by Ashoka University’s Centre for Economic Data and Analysis. Covid-19 was only the last straw: 11 million jobs had already been lost before the pandemic hit.
Rather than rising to 25%, the share of manufacturing in the overall economy plunged to 14% in 2020-21 from 17% in 2015-16. For all his rhetoric of reviving Indian manufacturing to compete with China, Modi has done much worse than his predecessor Manmohan Singh. Is that the impression you get from reading India’s ‘free and fair’ media?
With domestic manufacturing spiralling downwards, the Modi government has instead been talking up buoyant foreign direct investment flows to India. The government recently celebrated record FDI flows of $82 billion in 2020-21, of which $28 billion was accounted for by one transaction: the sale of Reliance Jio stock to Facebook, Google, and KKR. FDI in recent years has mostly flowed to information technology, computers, e-commerce, and transportation. Manufacturing gets relatively little, as this chart shows:
To summarise, Make in India has failed to achieve any of its stated goals. Rather, every indicator has worsened, be it the share of manufacturing in the economy or the number of jobs generated in manufacturing. The pandemic is no excuse: it only accelerated a slide that had been underway for several years.
This might explain why the government’s rhetoric has shifted to Atmanirbhar Bharat, or self-sufficiency. Who needs results when you can just move the goalposts?
Amitabh Dubey is President of Professionals’ Congress - Delhi, and a member of the Indian National Congress’ Uttar Pradesh manifesto committee.
The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.