With a swanky logo in the backdrop and the brass of India Inc. before him, Narendra Modi launched his ambitious “Make in India” programme in Sept. 2014.
Seventeen months later, the Indian prime minister’s plan to draw more foreign direct investment (FDI) to turn Asia’s third largest economy into a manufacturing hub may well be working.
“In the period October 2014 to December 2015 (15 months after ‘Make in India’), FDI inflow has increased 29% compared to the 15-month period prior to the launch,” commerce minister Nirmala Sitharaman told India’s upper house late last month. “However, in the 17-month period up to February 2016 after the launch of ‘Make in India’, FDI inflows have increased by 37% while FDI equity inflows have increased by 47% compared to the previous 17 months.”
In fact, in 2015, India beat China to become the top FDI destination in the Asia-Pacific, with some $63 billion worth of investments coming in.
Now that’s quite an achievement, if the significant jump in FDI inflow is indeed a result of “Make in India.”
Yet, the government can’t quite make that assertion with any accuracy. Because, it doesn’t have centralised data on the prime minister’s flagship initiative.
In India’s lower house, a group of five members of parliament asked Sitharaman the following, as part of a larger question on “Make in India”:
…the details of the agreements signed with other countries under “Make in India” programme and the investments/FDI made and approved, therein, sector and company-wise along with the likely employment generation therefrom…
In her reply on May 02 (pdf), the minister responded: “No such information is maintained centrally at one place.”
By design, “Make in India” is a mix of well-devised public relations campaign and the streamlining of government processes to “drive investment, foster innovation, develop skills, protect IP, and build best-in-class manufacturing infrastructure,” according to the programme’s website. The plan is to focus on 25 key industries, including power, construction, automobiles, and railways, and ensure that the manufacturing sector is able to constitute 25% of India’s GDP by 2020.
It is, therefore, somewhat surprising that the government doesn’t have a measure of exactly how each of these focus industries are responding to “Make in India.”
According to numbers furnished (pdf) by Sitharaman while replying to another parliamentary question, here’s how the sectors that attracted the most FDI equity inflows in fiscal 2015 have performed lately, in terms of drawing investments.
Clearly, the growth has been uneven. That is all the more reason why the Modi government would do well to track where—and how— “Make in India” is actually making it happen.