Recently the Efficient Manufacturing magazine solicited views from their advisory panel on the Make in India policy promoted by the Modi Government.
Following are their questions and our answers:
How do you think the “Make in India” campaign will affect the Indian manufacturing sector, in short-term as well as long-term?
Today the manufacturing in India is focused on two end consumers: The well-established consumers in export markets as well as the economically well off citizens inside the country. The infrastructure developments such as the highways and airport facilities meet the needs of manufactured goods such as automobiles, the main sector of growth in India besides IT. While this has had spillover effect in terms of increase in domestic consumption and hence the better living opportunities for many, it still covers a small percentage of Indian population.
The “Make in India” campaign brings focus to the manufacturing sector as a whole and hence it is a very welcome initiative. The outcome of this program will depend on the answers to the questions of: “Make in India for whom?” and “Make in India of what?”
- In order for a large and lasting impact, “Made in India for whom?” has to manifest itself into “made in India for the larger population of India and their mass consumption”. It also has to translate itself in terms of goods and services that will be consumed by the larger cross section of the society. This will include manufacture and production of goods and services that boost the production of energy, water supply, housing and mobility inside of rural India. Small roads and allys winding across the huts of India remain untouched, while the highways skirt around these impoverished villages connecting the few economically better off urban areas.
- Similarly “Made in India of what?” has to translate into goods and services that enhance the efficiency and productivity of skilled workers in rural area. While large cranes and heavy earth moving equipment help to accelerate the building of highways and high rise buildings, the hand tools used by carpenters and masons and potters in rural India remain the same from over a century ago! Increasing the efficiency, productivity, quality and throughput are the primary goals of any manufacturing effort. The same goals can be set to achieve better outcomes in the output of millions of workers in rural India. Then the “Make in India of what?” will assume renewed focus and application of a wide range of hand tools and power tools and their use, which are taken for granted in many of the industrially advanced nations. Such increase in productivity and quality in the work output in the rural area could have a multiplier effect far larger than the current focus areas for manufacturing and their expected trickledown effect from the urban affluence to alleviate rural poverty.
It is important that the above two points are taken in context. I do not suggest the above at the exclusion of the current emphasis and advancement in manufacturing through automotive, aerospace and other sectors. Progress in these areas must be maintained and sustained, while casting a wider net for manufacturing that also addresses and meets the day to day needs of the larger population. It need not be either/or. It needs to be comprehensive, as a whole, as a system.
How can the government and the manufacturing industry collaborate to make this campaign a success? What are your recommendations?
Collaboration has to be at the heart of any future initiatives. The resources and investment required for manufacturing infra-structure are rather large. Hence it is imperative that all available assets are deployed to the maximum extent possible. This is analogous to maximizing the capacity utilization in any manufacturing endeavor. As a rapidly growing economy, India has a network of resources related to manufacturing in academia, government sector and industry. My personal experience in the past few years in an effort to bring these resources together has been very positive. But, it is not a natural anywhere in the world. But, “Make in India” initiative could be a catalyst to identify and foster such alliances for manufacturing eco-system development.
Do you think the “Make in India” campaign will help raise the share of manufacturing in the GDP, from the current 15% to 25%, by 2020?
There is also a worldwide effort to increase the role of equipment with programmable automation (such as robots, autonomous guided devices – such as drones) that can dramatically reduce the role of human labor in the manufacturing floor. This could have a distinct impact in terms of a decline in manufacturing using low cost labor resources. Indian manufacturing, especially for export markets may have to face this threat, while the manufacturing for domestic consumption could grow. The net effect of these two will also have an impact on the size of manufacturing activity inside of India as a % of GDP.
While that could be the goal, the outcome will largely depend on specific directions and initiatives as mentioned above and the emphasis on deliverables at all levels.