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Make in India program-Growth opportunities and challenges

Represented by a roaring lion signifying continuous progress PM Narendra Modi set out The Make in India campaign on September 25th, 2014 to transform India into a global design and manufacturing hub.

The concept focuses on 4 main aspects –

  • Kickstarting new initiatives
  • Attracting foreign direct investment
  • National manufacturing for a global audience and
  • Ease of doing business.

Automobiles, Defence Manufacturing, Space, Electronic Systems, Ports and Shipping, Railways, Aviation, Construction, Tourism, and Hospitality are some of the industries that are expected to benefit from this humongous campaign.

India has its fair share of advantages like a strong labor pool, a large domestic market and increasing domestic demand which can make this campaign a success. However, we as a country will only be able to leverage these upsides by eliminating some major bottlenecks that exist within the external environment of private small medium businesses.

Let us first discuss the major hurdles to MSME ecosystem in India.

Regulatory Procedures and Taxation Policies

The internal business environment of our nation needs a major overhaul when it comes to bureaucracy, legal regulations, taxation policies, export systems and acquisition of resources like finance, land, infrastructure, licenses etc. for Medium and Small Enterprises. The government intends to break these barriers by simplifying regulations, infusing technology to digitalize paperwork, building a single window mechanism at state levels to acquire and renew licenses thereby making local manufacturing faster and efficient.

Rapid and Radical Labor Reforms

The second major set of challenges includes the availability of skilled manpower, implementation of stringent labor laws, high attrition rates and talent retention. Radical labor reforms coupled with 100% inclusion of casual workforce into vocational training and skills up gradation is the need of the hour. Besides government, the private entrepreneurs also need to look at manufacturing with a long-term perspective so as to create value through the provision of regular training and justifiable compensation to its labor workforce.

Innovation and Technology

Introduction of advanced technologies at the right time is an absolute must for our production units. Innovation, continuous product research, and development will not only foster development and growth of Indian manufacturing industry but will also help in realizing the Make In India campaign right from the basics.

Building an export ecosystem

If India has to compete with the big players on a global scale then Indian entrepreneurs and policymakers ought to think Bigger and Better. Ports play a crucial role in the trade of manufactured goods. Significant delays have been observed in turnaround times, shortage of customs officers and lack of coordination among agencies. This has adversely impacted export interests of Indian and foreign manufacturers alike. A well-structured plan needs to be laid out to develop ports infrastructure to meet these challenges and attain required capacity expansion to sharply improve India’s export competitiveness.

Redefining our Image and Provision of a Global Platform to MSMEs in India

As India is becoming technology savvy and consumers make informed choices through mass digitization of information, there can be many opportunities where private and public partnerships can be established. Another concern area is where MSMEs struggle to identify a global market to establish their footprint. While government has many programs to incentivize such initiatives, private players can add enormous value by providing a global market place where seamless transactions can happen and government agencies can facilitate the trade flow.

Here in this context, attempt made by Indian start-up, Moglix warrants a mention where it has taken initiative to bring industrial supply MSMEs under its fold by which overseas customers can discover them through a tech-platform. If government identifies and channelize all such attempts to harness Indian brand equity, then half the battle is already won. Government has already shown a lot of intent in this direction and now the effort should be to muster all its resources to make it happen.

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