MAKE IN INDIA: A PANACEA FOR THE GROWTH
In keeping with the theme of development, Prime Minister Mr. Narendra Modi has launched “The Make in India” campaign, targeted to transform India in to a manufacturing leader.
OBJECTIVE OF THE MAKE IN INDIA PROGRAMME
‘Make in India’ aims at increasing the GDP and tax revenues in the country, by producing products that meet high quality standards, and minimising the impact on the environment.It was also rolled out with the aim of creating millions of jobs in the country.
Fostering innovation, protecting intellectual property, and enhancing skill development are the other aims of the program according to the ‘Make in India’ website.
POLICIES UNDER MAKE IN INDIA PROGRAMME
Following are the major policies under the Make in India campaign:
The Make in India program includes major new initiatives designed to facilitate investment, foster innovation, protect intellectual property, and build best-in-class manufacturing infrastructure.
- Process of applying for Industrial License & Industrial Entrepreneur Memorandum made online on 24×7 basis through eBiz portal.
- Validity of Industrial license extended to three years.
- Doing business in India just got easier – new de-licensing and deregulation measures are reducing complexity, and significantly increasing speed and transparency.
- Services of all Central Govt. Departments & Ministries will be integrated with the eBiz – a single window IT platform for services by 31 Dec. 2014.
- Major components of Defence products’ list excluded from industrial licensing.
- Dual use items having military as well as civilian applications deregulated.
FOREIGN DIRECT INVESTMENT
Government eases FDI norms in 15 major sectors.
- Townships, shopping complexes & business centres – all allow up to 100% FDI under the auto route. Conditions on minimum capitalisation & floor area restrictions have now been removed for the construction development sector.
- India’s defence sector now allows consolidated FDI up to 49% under the automatic route. FDI beyond 49% will now be considered by the Foreign Investment Promotion Board. Govt approval route will be required only when FDI results in a change of ownership pattern.
- Private sector banks now allow consolidated FDI up to 74%.
- Up to 100% FDI is now allowed in coffee/rubber/cardamom/palm oil & olive oil plantations via the automatic route.
- 100% FDI is now allowed via the auto route in duty free shops located and operated in the customs bonded areas.
- Manufacturers can now sell their products through wholesale and/or retail, including through e-commerce without Government Approval.
- Foreign Equity caps have now been increased for establishment & operation of satellites, credit information companies, non-scheduled air transport & ground handling services from 74% to 100%.
- 100% FDI allowed in medical devices
- FDI cap increased in insurance & sub-activities from 26% to 49%
- FDI up to 49% has been permitted in the Pension Sector.
- Construction, operation and maintenance of specified activities of Railway sector opened to 100% foreign direct investment under automatic route.
- FDI policy on Construction Development sector has been liberalised by relaxing the norms pertaining to minimum area, minimum capitalisation and repatriation of funds or exit from the project. To encourage investment in affordable housing, projects committing 30 percent of the total project cost for low cost affordable housing have been exempted from minimum area and capitalisation norms.
- Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.
- Composite caps on foreign investments introduced to bring uniformity and simplicity is brought across the sectors in FDI policy.
- 100% FDI allowed in White Label ATM Operations.
INTELLECTUAL PROPERTY RIGHTS
- Establishing a vibrant IP regime in the country.
- Efficient processing of IP applications by inducting additional manpower, augment IT facilities and automation in Intellectual Property Offices.
- Adopt best practices in IP processing.
- Strengthening public delivery of IP services.
- Highest levels of transparency and user-friendliness.
- An increase in manufacturing sector growth to 12-14% per annum over the medium term.
- An increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
- To create 100 million additional jobs by 2022 in manufacturing sector.
- Creation of appropriate skill sets among rural migrants and the urban poor for inclusive growth.
- An increase in domestic value addition and technological depth in manufacturing.
- Enhancing the global competitiveness of the Indian manufacturing sector.
- Ensuring sustainability of growth, particularly with regard to environment.
Following challenges could be evident in the path of Make in India programme:
- India must also encourage high-tech imports, research and development (R&D) to upgrade ‘Make in India’ give edge-to-edge competition to the Chinese counterpart’s campaign. To do so, India has to be better prepared and motivated to do world class R&D. The government must ensure that it provides platform for such research and development.
- India’s small and medium-sized industries can play a big role in making the country take the next big leap in manufacturing. India should be more focused towards novelty and innovation for these sectors.
- Creating healthy business environment will be possible only when the administrative machinery is efficient. India has been very stringent when it comes to procedural and regulatory clearances.
- India’s make in India campaign will be constantly compared with China’s ‘Made in China’ campaign. The dragon launched the campaign at the same day as India seeking to retain its manufacturing prowess. India should constantly keep up its strength so as to outpace China’s supremacy in the manufacturing sector.
- India should also be ready to tackle elements that adversely affect competitiveness of manufacturing. Unfavorable factors must be removed. India should also be ready to give tax concessions to companies who come and set up unit in the country.
- Mumbai is all set to host the lion. City officials, government bodies and private players are gearing up to transform the city into a melting pot of art, music and all things culture. The plans include larger-than-life interactive digital displays, street food festivals, art and culture shows, musical performances, street art shows, shopping carnivals and exhibitions across museums and galleries.
- The government of India provides sector specific subsidies for promoting manufacturing for example in order to boost manufacturing of electronics, the Govt. of India provides capital subsidy of up to 25% for 10 years.
- Incentives are provided for units in SEZ/NIMZ as specified in respective acts or setting up project in special areas like North East Region, Jammu & Kashmir, and Himachal Pradesh & Uttarakhand.
- The Government of India in its Union Budget 2014-15, has provided investment allowance at the rate of 15 per cent to a manufacturing company that invests more than US$ 4.17 million in any year in new plant and machinery.
- The corporate tax rate for companies registered in India to go down from 30% to 25% of net profits in a phased manner over the next four years starting from FY 16-17.
- An expert committee to examine the possibility and prepare a draft legislation where the need for multiple prior permission can be replaced by a pre-existing regulatory mechanism.
- Goods and Services Tax proposed to be implemented from April 01, 2016.
SOUCE: GOVT WEBSITE.
Team Aspirant Forum