While it will take some time to see the full impact of the Modi Government's ‘Make in India' campaign, clear signs of positive response are surely seen. A key parameter to analyse the progress on this front would be FDI flow in the industries.
According to the data available with the Department of Industrial Policy and Promotion (DIPP) (Ministry of Commerce & Industry), the FDI equity inflow received in the ‘Industry' sector head shows a whopping 35.42 percent growth after the launch of ‘Make in India' in September 2014 compared to the figures of the preceding corresponding period. The FDI Equity inflow between October 2013 to May 2014 was US$ 7.68 billion. From October 2014 to May 2015, the FDI flow stands at US$ 10.40 billion.
It may also be noted that the CII ASCON Industry Survey for the April - June FY16 quarter reveals a reversal from the earlier trend of slowing growth, with indications of a recovery taking shape in the economy.
The Survey was conducted from mid-June till end of July 2015 and tracks the estimated growth trends in terms of Production, Sales and Exports for Q1 FY 16. Responses have been segregated in the following four broad categories: (i) ‘Excellent' (growth in excess of 20%), (ii) ‘High' (growth in the range of 10-20%), (iii) ‘Moderate' (growth in the range of 0-10%) and (iv) ‘Negative' (growth less than 0%).
Of the 93 sectors surveyed, the share of sectors that have recorded excellent growth of more than 20 percent in Q1 (April -June) FY16 quarter has surged up to 16.1 percent (15 out of 93 respondents) as against 7.1 percent (8 out of 112) recorded in the year ago period.
This is a clear indication of improvement over the last year. "The government should continue to undertake policy reforms aimed at reviving investments, alleviation of implementation bottlenecks and unshackling entrepreneurial activity to further drive growth. This would entail continuing with procedural simplification to facilitate ease of doing business, ensuring transparent, predictable and consistent tax system and working on the pending reform agenda especially of land, labour and environment to help power the ‘Make in India initiative'. The government and industry need to work together to regain the earlier growth momentum," said Dr Naushad Forbes, Chairman, CII Associations' Council (ASCON) and President Designate, Confederation of Indian Industry (CII).
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