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Make in India: Steps taken by Modi government to boost manufacturing sector

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By NewsGram Staff Writer

Talking about Prime Minister Narendra Modi’s  pet scheme ‘Make in India’, the Minister of State in the Ministry of Commerce & Industry, Nirmala Sitharaman today informed that a number of initiatives have been taken by the government to improve ease of doing business in India.

” A number of steps have been taken by the government to improve ease of doing business. Rules and procedures have been simplified and a number of products has been taken off licensing requirements,” said Sitharaman.

‘Make in India’ initiative aims to provide a congenial environment to the business community so that they can devote their effort, resources and energy in productive work

Here are few important steps taken by the government to give a boost to manufacturing sector in India:

Creating conducive environment: The government intends to provide a robust infrastructure to business through development of various facilities and institutions. “We are aiming at develop industrial corridors and smart cities to provide a conducive working environment with state-of-the-art technology,” the minister said, and added, ” Efforts are also being made to provide skilled manpower through a national skill development programme. ”

Roping in Foreign Direct Investments: “The Policy in defence sector has been liberalized and FDI cap has been raised from 26% to 49%. 100% FDI has been allowed in defence sector for modern & state of the art technology on case to case basis. 100% FDI under automatic route has been permitted in construction, operation and maintenance in Rail Infrastructure projects,” the Commerce Minister informed.

Target specific approach: Twenty five industry related ministries are working on sector specific targets, which have been identified by them after detailed discussion with various stakeholders in the National Workshop held on 29th December 2014. Each ministry has identified action plan for the next one year and three years.

Investor Facilitation Cell : An Investor Facilitation Cell has been created by the government with a dedicated team to guide and assist first-time investors. “Make in India program represents an attitudinal shift in how India relates to investors; not as a permit-issuing authority, but as a true business partner, ” Sitharaman said.

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Scheme to Spur Mobile Phone, Semiconductor Manufacturing Soon: FM Nirmala Sitharaman

Already, India, which has second position in the global mobile handsets market, is projected to grow to 302 million units this year

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FM Nirmala Sitharaman stated that India is still projected to be the fasteat growing economy. Wikimedia Commons

Finance Minister Nirmala Sitharaman on Saturday said a scheme on encourage manufacturing of mobile phones, semiconductor packaging and electronic equipment is on the anvil.

Making the announcement in the Budget speech, she said: “There is a cost advantage for electronics manufacturing in India”.

But she says that this needs more investment. “I propose a scheme to encourage manufacturing of mobile phones, semiconductor packaging and electronic equipment”, she said, adding this can be used for manufacture of medical devices as well.

A detailed scheme with details will be released soon, the FM said.

A Modified Special Incentive Package Scheme (MSIPS) to promote aggressively a 20-odd component manufacturing ecosystem in the country that will go beyond making mobile phones could be on the anvil. This could be an overarching policy which goes beyond interest subvention and credit default guarantee and it will be outside the scope of MeitY (Ministry of Electronics and Information Technology) and by an outside department/arm since ministry’s role is that of a policymaker only.

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There is concern about the speed and nature of the government and industry’s response, and will these actions turnaround things immediately, or not. Pixabay

M-SIPS was first floated to encourage electronics manufacturing and it ran from 2012 to 2018. It promised multiple incentives for 10 years, including a capital subsidy of 20 per cent in special economic zones (SEZs) and 25 per cent in non-SEZs, and reimbursements of countervailing duty or excise on capital equipment for non-SEZ units.

For some high-capital projects, it also offered reimbursement of Central taxes and duties. The incentives were available for 29 electronic verticals across the manufacturing value chain. The period of benefits was reduced to 5 years from 10 years after it was recalled.

M-SIPS was created to provide financial incentives across the ESDM (Electronics System Design and Manufacturing) value chain to compensate for cost disability in manufacturing and Electronics Manufacturing Clusters (EMC).

Also Read: Several Pixel 2 Owners Bugged by Camera Failure Post Updates

This sector has shown tremendous promise wherein exports have grown from a mere US $200 million three years ago to over $2 billion in the year 2019-20 in handsets alone — a 10x growth in 36 months.

One of the most successful stories around Make in India is mobile handset manufacturing with Noida outside Delhi becoming the new hub. The size of the domestic mobile manufacturing industry in FY 2019-20 is expected to be Rs 1,35,000 crores as against Rs 94,000 in FY 2016-17.

Already, India, which has second position in the global mobile handsets market, is projected to grow to 302 million units this year. (IANS)