Make in India: A Longer Run

The initiative’s longevity depends on its wholesomeness.

Desperate times call for desperate measures. Rising unemployment in the international arena and increasing costs of labor have created yet another need for redressal. Back in 2014, with the latent objective of increasing the rate of employment, and make the economy a manufacturing hub. The economy seems to be tasting progress through the initiative, inspite of criticism and opposition from various segments.

Urbanisation has been in one of its most aggressive forms in India. In 2015 alone, the rate of urbanisation was 32.7%. However, as a developing economy, India faces the dual conundrum of rising urbanisation and unemployment rates, in quite a boggling sense. On the one hand, there is need for more resources to initiate and develop urban industries, trade and commerce, while on the other, there exists an increasing requirement of agricultural land to boost these urban functions. What cuts these two extreme paradoxes right in between, is the need to improve livelihoods and standards of living. The current unemployment rate in India stands at 4.9 percent, down by almost 50 percent since 2010. It is no secret that rapid urbanisation has happened with the hope of better livelihoods. Hope of greater number of opportunities, improved incomes, and a general opinion of a better standard of living. This also increases administrative responsibilities on the part of government. To provide for the more than adequate supply of labour in the form of part time workers, contract workers, and daily labour in the cities, the administration would have to come up with employment opportunities. Call it the method in madness, but the Make in India initiative serves the purpose, among several others.  From a macroeconomic perspective, the initiative also acts as a tool to mend the current account, something that has been also been substantiated by the initiative.

The other side of the story is dominated by detractors worrying about increasing levels of unemployment in agriculture. Perhaps a reminder of the prevailing conditions would suffice. The agricultural sector employs almost 58 percent of the population in India. The high percentage is despite complex land acquisition laws, and several intermediaries that stand as encumbrances. As if this is not proof enough, conducive monsoons have somewhat mitigated the need to worry further about the need for sources of irrigation in drier areas. This is notwithstanding the advancements in agricultural technology in the form of machinery and storage, fiscal advantages, and the already high and increasing percentage of organic product exports.

Some may argue that increased opportunities in cities would mean more aggressive migration from rural areas to cities; however, as long as there are veritable opportunities created in not only modernised industrial set-ups, but also traditional and unorganised establishments, there will be space for innovation. Innovation also asks for awareness and higher levels of literacy. Investments towards building educated, aware, and socially sustainable societies must happen simultaneously.  What may strike as an impediment now is that there would be sectoral and regional imbalances, owing to limited participation of sectors only from the manufacturing industries. A wider scope would definitely provide a larger base of r employment, innovation and entrepreneurship.

 

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