Narendra Modi has come to power by promising rapid economic growth that delivers millions of jobs. To achieve this, Modi has devised a ‘Make in India’ policy .
Launched with a blaze of publicity , it seeks to make India a manufacturing giant and attract global investors.
It aims to raise the share of manufacturing in GDP from the current 13-14% to 25%. Modi is envious of the rise of China as a manufacturing giant. India has lagged far behind for decades, and he naturally wants India to catch up.
Problem: for all the hoopla and cheering at various Modi meetings and summits, the growth of manufacturing in the July-September quarter was 0.1%. The growth of fixed investment, the foundation of future production, was virtually zero. Alas, people are not “making in India“, and are not investing to make in the future either. Probably things will improve a bit in the next quarter: early trends suggest that manufacturing growth may go up to 2.5%. But remember that during the much-derided Nehruvian licence-permit raj, manufacturing used to grow at 4-5% per year! One industrialist who does not want to be quoted asks, “Why will foreigners come to invest here when Indians are not investing?” During his foreign visits, Modi urged global giants to Make in India. They replied politely that they will surely consider this, but such politeness must not be confused with serious intent. A US businessman said during Modi’s US visit, “There’s lots of sizzle, but where’s the steak?” He’s still waiting.