Prime Minister Narendra Modi will unveil his signature ‘Make in India’ initiative on September 25 with a raft of proposals designed to get foreign companies to set up shop and make the country a manufacturing powerhouse.
Modi will announce the plan at an event in Vigyan Bhawan that will be beamed live not just across the country but to gatherings of industrialists across the world. Modi, who leaves for the United States the following day, will also personally reach out to thousands of global CEOs and corporate influencers in a grand sales pitch, sources familiar with the matter said.
The Make in India programme, first mooted by the PM in his Independence Day speech last month, will lay emphasis on 25 sectors with focus on job creation and skill enhancement.
These include automobiles, auto components, design manufacturing, renewable energy, mining, textiles, bio-technology, pharmaceuticals, electronics and ports.
As part of the plan, foreign investment caps in construction will be eased to enable greater participation in the NDA government’s 100 smart cities project and affordable housing, said the sources. FDI caps in railways and defence production have already been eased to 100% and 49%, respectively.
The government’s push for manufacturing comes at a time when many big companies are seeking an alternative to China as costs and risks there rise. The objective is also to ensure solid growth and employment creation. During 2005-12, India added only 15 million jobs, a quarter of the figure added in the previous six years.
Modi will make small factories central to the plan of absorbing job aspirants and reviving the manufacturing sector. As part of Make in India, sources said that the government plans to introduce a single labour law for small industries by December.
India has its work cut out: it ranks 134 out of 189 countries in the World Bank’s ease of doing business index in 2014, and investors have been frustrated by rigid labour laws, corruption and inconsistent application of rules.
To facilitate Make in India, a dedicated ‘investor facilitation cell’ has been set up with instructions to respond to foreign investment proposals within 24 hours.
“All ministries have been asked to appoint a nodal officer to head an investment team to respond to FDI proposals,” one of the sources said.
All state governments and ministries have been asked to replace all application registers with a single electronic register and also ensure that no “inspection” of any factory or unit is carried out by officials without approval from the head of the department. The validity of industrial licences has been extended from two years to three years.
Sources said in terms of size and reach, Modi’s Make in India launch will be grander that the Teacher’s Day programme in which he addressed school students across the country.
Industry associations such as CII and Ficci have been co-opted for the programme in which state governments have been advised to identify specific obstacles that need ironing out to enable faster investment flow.
Global investors have been unsparing in their criticism about complex rules and bureaucratic red tape in India, but there are signs of a turnaround in the country’s image.
“Indian politicians are fond of... grandiose announcements, but in Modi’s instance it may have some substance,” Glenn Levine, an economist with Moody’s Analytics, said in a recent report.