The vision of India as Viksit Bharat, a developed, US$30 trillion economy by 2047, is possible only if the country grows at a rate exceeding 10 percent per year. However, despite being one of the fastest growing economies, our growth rate hovers between 6 and 7 per cent ~ far short of the target growth rate. Perhaps, the time has come to take stock, and decide what needs to be done to realise our vision.

The Government aimed to grow the economy quickly by energising the manufacturing sector with initiatives like Make in India (2014), Production Linked Incentive (PLI) (2020) and Design Linked Incentive (DLI) (December 2021). Make in India, had two major objectives viz. creation of 10 crore new jobs in the manufacturing sector, and enhancing the share of manufacturing in GDP, from 15 to 25 per cent, in ten years.

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However, after ten years of Make in India, the share of manufacturing in GDP still hovers between 16 to 17 per cent, and there has been little employment generation in the manufacturing sector. Rather, according to NSSO sample surveys, manufacturing employment has declined from 12.6 per cent of total employment in 2011-12 to 11.4 per cent in 2022-23. PLI and DLI have fared little better; even with a budget of Rs.2.96 lakh crore, success has been partial.

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As revealed in its fourth review, PLI seems to have degenerated into promoting local ‘assembling’ of smartphones with imported components, resulting in huge export values, but little value addition. An analysis would reveal that the blame for the lack of success does not lie entirely with the Government. On its part, the Government liberalised the FDI regime, introduced single-window clearances, reduced compliance burdens, decriminalised a host of offences, drastically cut corporate tax rates, invested huge amounts in infrastructure development, and recently reduced both the Repo Rate and Cash Reserve Ratio, by 1 percentage point.

But, response from industry was sluggish; the Finance Minister loudly wondered why private investment in manufacturing had not gone up, and her Chief Economic Advisor rued the tendency of Indian industrialists to invest abroad, and not in India. Probably, despite all manner of incentives and exhortations, the private sector sees immediate and guaranteed profits in trading, so it keeps away from manufacturing. Our famed start-ups are no better; Commerce Minister Piyush Goyal,........

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