: Rewind: Invoking Hanuman to spur manufacturing #IndiaNEWS #Business By B Yerram Raju 2015 was the year of hope for the revival of manufacturing when the government of India came up with initiatives

Rewind: Invoking Hanuman to spur manufacturing #IndiaNEWS #Business
By B Yerram Raju
2015 was the year of hope for the revival of manufacturing when the government of India came up with initiatives such as Make in India, symbolising a ferocious tiger, Startup India, Stand-up India, Digital India and Skill India. 2020 was another landmark year with the announcement of Atma Nirbhar Bharat to remain resilient at the start of the pandemic. These were followed up by PM Gati Shakti, Production Linked Incentive Schemes (PLI), several initiatives targeting the growth of MSMEs and other district-focused programmes as accelerated efforts.
Yet, disappointments did not distance and the Finance Minister recently had to kindle the strength of India Inc by invoking Lord Hanuman – whose strength had to be reminded both to cross the seas to reach the kingdom of Ravana and fetch Sanjivani (the life-giving herb) to bring Laxman back to life – for the revival of manufacturing growth.
Despite crowding in the private sector into a friendly investment regime, enactment of Labour Code, Insolvency and Bankruptcy Code, and India becoming the fifth largest economy in the world, manufacturing not reaching even the 12th Five Year plan goal of 25% of the GDP is baffling. Almost a decade closing in, and we are still searching for the right solutions. What’s worse, notwithstanding the rosy-looking GDP, India has widespread unemployment. At the average level, incomes haven’t grown fast enough to sustain a consumption drive.
During the last four decades (1980-2020), the average profit of industries grew nearly 50 times, number of factories too doubled during the last decade compared with the rest of the decades. And yet, manufacturing reaching its potential fifth position in the world as predicted by BCG in 2013 remains distant
The RBI data on Investment as ratio of GDP indicates that the best happened in the initial euphoria of change, that is, 2014-15 when it was 30% and thereafter, ‘not all the perfumes could sweeten the little hand’ and till 2020 it remained at least 2% below that level.
Contrastingly, the UPA regime saw the best investment at 30. 7% – incidentally in its very first year. During the decade of UPA rule, investments in the economy grew 4. 4%. The NDA regime during the last eight years could not see a consistent rise in the investment-GDP ratio beyond 29%, despite some occasional positive trends, thanks to ‘Make in India’ triggering on average two lakh factories per annum in the last decade.
The RBI data on Investment as ratio of GDP indicates that the best happened in the initial euphoria of change, that is, 2014-15 when it was 30% and thereafter, ‘not all the perfumes could sweeten the little hand’
Alok Sheel, former Secretary of the PM’s Economic Advisory Council, in a commentary in the EPW (August 20, 2022), estimates an output loss of 6.

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