Remember Make in India? On 13 Feb 2016, Prime Minister Narendra Modi declared: “we want the share of manufacturing in our GDP to go up to 25% in the near future.” The programme’s stated goal was to hit this target by 2022 and to generate 100 million manufacturing jobs in India.
So where do we stand one year before our deadline? In a very dismal place, and not only because of the Covid19 pandemic.
Rather than adding 100 million manufacturing jobs, India lost 24 million jobs between 2016-17 and 2020-21, according to a recent analysis by Ashoka University’s Centre for Economic Data and Analysis. Covid19 was only the last straw: 11 million jobs had already been lost before the pandemic hit.
Rather than rise to 25%, the share of manufacturing in the overall economy plunged to 14% in 2020-21 from 17% in 2015-16. For all his rhetoric of reviving Indian manufacturing to compete with China, Modi has done much worse than his predecessor Dr Manmohan Singh. Is that the impression you get from reading India’s “free and fair” media?
With domestic manufacturing spiralling downwards, the Modi government has instead been talking up buoyant foreign direct investment (FDI) flows to India. The government recently celebrated record FDI flows of US$82 billion in 2020-21, of which $28 billion was accounted for by one transaction: the sale of Reliance Jio stock to Facebook, Google and KKR. FDI in recent years has been mostly flowed to information technology, computers, e-commerce and transportation. Manufacturing get relatively little, as this chart shows:
To summarise, Make in India has failed to achieve any of its stated goals. Rather, every indicator has worsened, be it the share of manufacturing in the economy or the number of jobs generated in manufacturing. The pandemic is no excuse: it only accelerated a slide that had been underway for several years.
This might explain why the government’s rhetoric has shifted to Atmanirbhar Bharat, or self-sufficiency. Who needs results when you can just move the goalposts?