<div>Prime Minister Narendra Modi launched his ambitious Make in India campaign last September, pledging to lower barriers to doing business and promote foreign investment. He was hoping to transform Asia's third-largest economy into a manufacturing powerhouse like China. Modi now has less than four years before the next Lok Sabha elections to make good on his campaign pledge. If he doesn't show results soon, the young electorate that swept him into office could just as easily vote him out.</div><div> </div><div>Experts say around 10 million people are added to labour force every year, India needs to generate 30,000 jobs every day. The Narendra Modi-led National Democratic Alliance (NDA) government will have to increase manufacturing's contribution to gross domestic product (GDP) to 33 per cent.</div><div> </div><div>On the first anniversary of the signature programme, Modi is in the US seeking to strengthen bilateral ties, and wooing companies to invest more in India. It has been almost a year since the programme was launched, so it's fair to ask if it has yielded any results.</div><div> </div><div>Quite a few commentators and media columnists are of the view that without a strong manufacturing sector — which has forward as well as backward linkages to construction, transport and related service industries — there just won't be jobs for the 10 million-odd people entering our workforce every year. In simple terms, the economic impact of manufacturing in India will go beyond direct employment. It will create jobs in the services sector and allied services like logistics, transportation, retail and so on. </div><div> </div><div>"Despite the conventional wisdom that says India's place in the global economy revolves around digital bits and services rather than material atoms, the country is starting to attract more attention for its manufacturing potential for a number of reasons: India is the third-largest economy in purchasing power parity after the US and China, it has a large population of engineers and factory workers, its intellectual property is widely respected, and it is easy to find English-speaking managers there," write Vijay Govindarajan and Gunjan Bagla in an article in<em> Harvard Business Review</em>.</div><div> </div><div>So what impact has the Make in India mission had so far?</div><div> </div><div>On the foreign direct investment (FDI) front, there has been a 48 per cent rise in FDI in India during October 2014 to April 2015 against a year ago. According to the Centre for Monitoring of Indian Economy, investment projects worth Rs 63,172 crore were completed in the manufacturing sector in April-June 2015, highest since Janurary-March 2010 quarter.</div><div> </div><div>In June, Japan's SoftBank Corporation teamed up with Bharti Enterprises and Taiwan's Foxconn to invest around $20 billion in solar energy projects in the country. The government plans to expand the renewable energy sector five-fold by 2022. The joint venture will initially put up solar parks with imported equipment but subsequently look at manufacturing solar panels in India itself.</div><div> </div><div>The government has awarded a record 56 defence manufacturing permits to private sector entities in the past year, which is more than the 47 licences its predecessor United Progressive Alliance government granted in the preceding three years combined and underlines its determination to have indigenous defence production as a cornerstone of its 'Make in India' drive.</div><div> </div><div>Analysts believe that the success of Make in India programme depends heavily on building infrastructure by creating an enabling policy framework and a conducive environment to expand the domestic manufacturing sector, which will eventually enable millions of young Indians to find employment. </div><div> </div><div>Over the next five years, India needs to invest around $1 trillion in infrastructure development, which has largely been funded domestically till now. As manufacturing would require free flow of raw materials and finished goods, improving logistics infrastructure such as port-to-inland connectivity, cargo airports, and so on would be imperative and these developments promise to transform India into a global manufacturing hub.</div><div> </div><div>Electronics is perhaps the biggest success story of Modi's Make in India initiative, with assured investments of over Rs 90,000 crore over the next five to 10 years. India's large and growing market - for everything from mobile phones and LED TVs to steel, chemicals and power equipment - no doubt makes it a compelling place for producing stuff that can be directly sold here.</div><div> </div><div>So far, it seems that apart from FDI, Make in India has not been able to boost manufacturing. Factory output has been tepid, but the silver lining is the June and July IIP, which increased by 4.3 per cent and 4.2 per cent respectively. </div><div> </div><div>Exports from India are still not out of the woods, with as many as 23 key sectors, including petroleum, engineering and leather, declining in August mainly due to a fall in global prices and a demand downturn. Also, overseas consignments of Made in India goods have been in the red since December, 2014.</div><div> </div><div>India's economy expanded 7 per cent in the first quarter, well below expectations and slower than the preceding three-month period, putting a dent in the Modi government's optimism about a strong recovery.</div><div> </div><div>The government's latest attempt to amend income tax laws to exempt foreign companies from MAT retrospectively from 2001 may aid sentiment further, but a weak global environment may trip up the government's ambitious plans in the short-term.</div><div> </div><div>Foreign investors have been circumspect about committing project funds to India because it languishes at a lowly 142 in the global rankings brought out in World Bank's Doing Business study - way behind China (ranked 90), Sri Lanka (99) and Pakistan (128).</div><div> </div><div>Modi has promised to speed up decision making and reduce the role the government plays in business. “The world is not going to wait for us. I know that,” Modi told the CEOs of 42 American companies with a collective net worth of $4.5 trillion. </div>
