Modi's $222 Billion Make-in-India Haul Masks Hurdles To Come

[Windjammer]

Modi's $222 Billion Make-in-India Haul Masks Hurdles To Come
All India | Natalie Obiko Pearson, Bloomberg | Updated: February 18, 2016 19:06 IST

The results of Prime Minister Narendra Modi's "Make in India" drive to attract foreign investment remain to be seen.

Prime Minister Narendra Modi's glitzy campaign this week to showcase India as the world's next manufacturing hub met with a few unpleasant realities of life in Mumbai: a fire engulfed one of the event stages and a strike by rickshaw drivers paralyzed traffic in the financial hub.

More worrying is the conflicting data and vague timelines that raise questions about Modi's "Make in India" drive, which on Saturday he called "the biggest brand created in India."

The tally for investment pledges soared on the final day to 15.2 trillion rupees ($222 billion) - more than triple what India has attracted through foreign direct investment since Modi came to office in May 2014.

Whether any of that will materialize remains to be seen. Right now the campaign launched in 2014 is best known for its logo - a lion made of cogs - that has shown up on billboards from Hannover to San Francisco.

"It hasn't really taken off," Radhicka Kapoor, a fellow at the Indian Council for Research on International Economic Relations, said of the campaign. "It'll take a lot more than a flashy new website, a new lion symbol, and catchy phrases to make India a manufacturing powerhouse and create productive jobs for its rapidly rising workforce."

Modi is pushing to lure manufacturers that can create millions of jobs, allowing India to take advantage of a demographic dividend as its population surpasses China in the next decade. While India's 1.3 billion people and high growth rate make it a stand-out among emerging markets, other indicators are grim: Investment remains weak, exports have fallen for 14 straight months, borrowing costs are relatively high and trade deals have stalled.

Modi's efforts to make it easier to operate in Asia's third-biggest economy have yet to show up in key external indicators. In the World Bank's Doing Business index, for instance, India still ranks 130 of 189 economies - well short of Modi's goal to crack the top 50 in two years.

One of the problems of Make in India, Kapoor said, is that it fails to address the outsized influence of states - many governed by Modi's opponents - on regulatory environments. Unions have opposed changes to some of the world's most rigid labor laws, and a fractious parliament has blocked a goods-and-services tax that would create a single market in India for the first time.

"India is a difficult place to govern, and one needs to have patience," said Nilmadhab Mohanty, a former civil servant and honorary senior fellow at the Institute for Studies in Industrial Development in Delhi. "But we don't have much time - other countries are competing for this and investors will go elsewhere."

Some relief for manufacturers may be coming in Modi's budget on Feb. 29. Reports say the government is considering a range of tax incentives to allow exporters to add more workers, particularly in labor-intensive industries like leather, gems and jewelry.

"Under the pressure of this campaign, the government machinery will be required to make a number of corrections on the policy front," Modi said in the speech on Saturday, speaking to an audience that included his Swedish and Finnish counterparts. "We are committed to make India an easy place to do business."

Since Modi took office in 2014, foreign direct investment has increased 33 percent to $64 billion from the previous 20-month period, according to data from the central bank. Yet that mostly went into an e-commerce sector that heavily imports consumer electronics, while job-intensive sectors like construction and energy have either seen declining investments or muted flows, according to Emkay Global Financial Services.

"The headline numbers gloss over the message emanating from the details," the brokerage said in an October report.

The event this week elicited 15.2 trillion rupees in investment pledges, Amitabh Kant, secretary of the Department of Industrial Policy and Promotion, told reporters in Mumbai. At least 80 percent of those are expected to lead to actual investments within three years, he said.

Added to promises Modi has drummed up from foreign leaders, total investment pledges come to at least $421 billion since he took power - more than what has come in during the past 14 years for which data is available.

There's reason to be skeptical that India will see the money. About 8 percent of nearly 40 trillion rupees proposed at investment summits during Modi's 11-year tenure as Gujarat chief minister was actually implemented, according to data from the state's Directorate of Economics and Statistics.

Modi, for one, knows the pressure is on to deliver.

"There is no time for incremental changes," he said last week. "We want a quantum jump."

Modi's $222 Billion Make-in-India Haul Masks Hurdles To Come

 

[The Eagle]

Modi's $222 Billion Make-in-India Haul Masks Hurdles To Come
All India | Natalie Obiko Pearson, Bloomberg | Updated: February 18, 2016 19:06 IST

The results of Prime Minister Narendra Modi's "Make in India" drive to attract foreign investment remain to be seen.

Prime Minister Narendra Modi's glitzy campaign this week to showcase India as the world's next manufacturing hub met with a few unpleasant realities of life in Mumbai: a fire engulfed one of the event stages and a strike by rickshaw drivers paralyzed traffic in the financial hub.

More worrying is the conflicting data and vague timelines that raise questions about Modi's "Make in India" drive, which on Saturday he called "the biggest brand created in India."

The tally for investment pledges soared on the final day to 15.2 trillion rupees ($222 billion) - more than triple what India has attracted through foreign direct investment since Modi came to office in May 2014.

Whether any of that will materialize remains to be seen. Right now the campaign launched in 2014 is best known for its logo - a lion made of cogs - that has shown up on billboards from Hannover to San Francisco.

"It hasn't really taken off," Radhicka Kapoor, a fellow at the Indian Council for Research on International Economic Relations, said of the campaign. "It'll take a lot more than a flashy new website, a new lion symbol, and catchy phrases to make India a manufacturing powerhouse and create productive jobs for its rapidly rising workforce."

Modi is pushing to lure manufacturers that can create millions of jobs, allowing India to take advantage of a demographic dividend as its population surpasses China in the next decade. While India's 1.3 billion people and high growth rate make it a stand-out among emerging markets, other indicators are grim: Investment remains weak, exports have fallen for 14 straight months, borrowing costs are relatively high and trade deals have stalled.

Modi's efforts to make it easier to operate in Asia's third-biggest economy have yet to show up in key external indicators. In the World Bank's Doing Business index, for instance, India still ranks 130 of 189 economies - well short of Modi's goal to crack the top 50 in two years.

One of the problems of Make in India, Kapoor said, is that it fails to address the outsized influence of states - many governed by Modi's opponents - on regulatory environments. Unions have opposed changes to some of the world's most rigid labor laws, and a fractious parliament has blocked a goods-and-services tax that would create a single market in India for the first time.

"India is a difficult place to govern, and one needs to have patience," said Nilmadhab Mohanty, a former civil servant and honorary senior fellow at the Institute for Studies in Industrial Development in Delhi. "But we don't have much time - other countries are competing for this and investors will go elsewhere."

Some relief for manufacturers may be coming in Modi's budget on Feb. 29. Reports say the government is considering a range of tax incentives to allow exporters to add more workers, particularly in labor-intensive industries like leather, gems and jewelry.

"Under the pressure of this campaign, the government machinery will be required to make a number of corrections on the policy front," Modi said in the speech on Saturday, speaking to an audience that included his Swedish and Finnish counterparts. "We are committed to make India an easy place to do business."

Since Modi took office in 2014, foreign direct investment has increased 33 percent to $64 billion from the previous 20-month period, according to data from the central bank. Yet that mostly went into an e-commerce sector that heavily imports consumer electronics, while job-intensive sectors like construction and energy have either seen declining investments or muted flows, according to Emkay Global Financial Services.

"The headline numbers gloss over the message emanating from the details," the brokerage said in an October report.

The event this week elicited 15.2 trillion rupees in investment pledges, Amitabh Kant, secretary of the Department of Industrial Policy and Promotion, told reporters in Mumbai. At least 80 percent of those are expected to lead to actual investments within three years, he said.

Added to promises Modi has drummed up from foreign leaders, total investment pledges come to at least $421 billion since he took power - more than what has come in during the past 14 years for which data is available.

There's reason to be skeptical that India will see the money. About 8 percent of nearly 40 trillion rupees proposed at investment summits during Modi's 11-year tenure as Gujarat chief minister was actually implemented, according to data from the state's Directorate of Economics and Statistics.

Modi, for one, knows the pressure is on to deliver.

"There is no time for incremental changes," he said last week. "We want a quantum jump."

Modi's $222 Billion Make-in-India Haul Masks Hurdles To Come

There is a smoke indeed indicates fire inside, seems to be fake numbers or the same may be revealed soon. Just my opinion. However, wanna a quantum jump is risky and suicidal in the end though shows the desperation.

 

[Windjammer]

There is a smoke indeed indicates fire inside, seems to be fake numbers or the same may be revealed soon. Just my opinion. However, wanna a quantum jump is risky and suicidal in the end though shows the desperation.

After the successful terminologies of shining India and Incredible India.....let's see what Make in India delivers.

 

[cerberus]

There is a smoke indeed indicates fire inside, seems to be fake numbers or the same may be revealed soon. Just my opinion. However, wanna a quantum jump is risky and suicidal in the end though shows the desperation.

Since Modi took office in 2014, foreign direct investment has increased 33 percent to $64 billion from the previous 20-month period, according to data from the central bank.

64 Billion $ in Just Span 1.8 years Since new GOI that Actually told You than Numbers It self Is Going in Right Direction
With Tax Reforms which done within this year Indian Growth will soon touch Double Digit

After the successful terminologies of shining India and Incredible India.....let's see what Make in India delivers.

Sir Its Already Delivering FDI within 20 months of the New GOI Itself A Indicator that MII on correct Path
@Abingdonboy @PARIKRAMA will Explain in you More

 

[Abingdonboy]

There is a smoke indeed indicates fire inside, seems to be fake numbers or the same may be revealed soon. Just my opinion. However, wanna a quantum jump is risky and suicidal in the end though shows the desperation.

After the successful terminologies of shining India and Incredible India.....let's see what Make in India delivers.

In 2015-16 India emerged as the number one FDI destination in the world and recorded its highest ever FDI inflow whilst globally FDI was down 16%- it's worth noting.

One doesn't change a nation's fortunes in 18 months or even 1 term (5 years), Make in India is laying the foundations for India's long term future and thus can only be judged in the long term (>10 years). Making declarative statments about failure now betrays your bias.


And by the way, "Incredible India" was a (succesful) tourism campaign, it has no relation to "Make in India" whatsoever.

 

[nik141993]

@Nilgiri we need your opinion& also @RiazHaq

 

[Nilgiri]

In 2015-16 India emerged as the number one FDI destination in the world and recorded its highest ever FDI inflow whilst globally FDI was down 16%- it's worth noting.

One doesn't change a nation's fortunes in 18 months or even 1 term (5 years), Make in India is laying the foundations for India's long term future and thus can only be judged in the long term (>10 years). Making declarative statments about failure now betrays your bias.


And by the way, "Incredible India" was a (succesful) tourism campaign, it has no relation to "Make in India" whatsoever.

Yes in greenfield FDI. The number will expand in coming years. More opex and brownfield FDI will arrive as well after that.

@Nilgiri we need your opinion& also @RiazHaq

The long term success of make in india depends on skill india. If the program follows the trajectory that 2015 already showed (a more than doubling from UPA numbers of skilled jobs created). It means we can see more than 8 million skilled and in demand people (mostly youth) produced in 2019 (last year of current Modi term).

However first we need to see what number is created this coming year. Current year (2015/16) it was shaping to be around 1 million....way up from the stagnant 200,000 (and even much less in some years) UPA saddled the economy with for a full decade (creating some bad bubbles even with the low overall growth).

Job creation increased by 118 per cent in July-December 2014: Survey - The Economic Times

If for 2016 we can get this number to 2 million+, we are in very good shape as far as the trend goes. It will coincide well with the investment ramping pattern.

Modi must ensure that this upcoming union budget impacts the MSME sector well, allows a couple more quarters for the banks to sort out/ restructure their NPA (through offtaking from the interest margins currently in place) with any extra injection that's needed....and appoint a very good labour minister and some MoS that will deal with the ITI program + allied programs effectively (quality should also be ensured as it drastically increases in coming years...not just quantity).

No need to give undue attention to our neighbours who are having trouble making a multi year investment vehicle "promised" by China actually materialise.

 

[Nilgiri]

Before anyone dismisses anything related to Make in India program, they should read this report from UNCTAD first:

http://unctad.org/en/PublicationsLibrary/wir2015_en.pdf

and pay attention to this figure:

and consider India was struggling to attract even 30 billion in FDI under the last administration.

According to UNCTAD:

Total FDI inflow to India in USD:

2013 = 28 billion

2014 = 34 billion (Modi arrives halfway through this year)

2015 = 59 billion

2016 = ??? (It will create butthurt whatever it is )

Also this report from CII should be read to explain the basics of Make in India program:

http://www.ies.gov.in/pdfs/make-in-india-oct15.pdf

 

[RiazHaq]

#India's culture wars holding country back #caste, #colonialism, #Sedition . #JNU #dalitvirodhimodi #Modi #Facebook India's culture wars are holding back progress | The National …

In just seven weeks, the new year seems to have become troublingly old for India. Three old issues with all their upsetting associations – caste, colonialism and potentially seditious dissent – are back on the news agenda. They’ve restarted some very unpleasant conversations and in such a corrosive way that there is a sense of a country deeply polarised and almost at war with itself.

In January, the suicide of a lower caste Hindu doctoral student triggered nationwide protests as well as knee-jerk official defensiveness. Last week, India’s rejection of Facebook’s free, basic internet service raised questions about the implications of its ingrained fear of foreign dominance. And a row over the right to public dissent is rumbling on. It started just days ago with a police crackdown on the campus of a leading university in the capital New Delhi.

All three events are linked in a way that goes beyond being newsworthy. They have the same pathology. All are deeply embedded in the Indian psyche, sickening the body politic and rendering debate unfit for purpose. It may be fair to say that the hold of these three issues has never really been meaningfully discussed with complete candour, in any way that would acknowledge the real difficulties of laying them to rest.

Consider the snowballing controversy over allegedly seditious activity, especially on university campuses. Last week, the head of the student union of Delhi’s Jawaharlal Nehru University was arrested for sedition, under a law that dates to British rule. This university is sometimes described as an IndianBerkeley, with a proud tradition of left-wing debate on a range of issues such as communalism, social marginalisation, market forces, nuclear disarmament and the role of religion in politics.

The student leader’s alleged offence was to organise a protest against the hanging three years ago of Afzal Guru, a Kashmiri separatist who was convicted and put to the death over a 2001 plot to attack India’s parliament. Guru always denied plotting the attack and his execution triggered protests in Jammu and Kashmir.
---
Some Indian commentators criticised the government’s response as “disproportionate” and far more insidious than an attempt to crush dissent; it “wants to crush thinking”. JNU research scholar Saib Bilaval wrote that it was “the othering of liberalism”, making it “unpatriotic” to profess liberal views. Students on other campuses have since spoken up about the right to free expression and an editorial headlined “Do not disagree” in the Indian Express newspaper thundered that the message of the JNU arrest sits uneasily with India’s overwhelmingly youthful demographic.

There has been a sharp rise in the number of sedition cases pointing to lower tolerance of dissent. More damagingly, it indicates an incomplete examination of the nature and mechanics of nation-building. In the 69th year of its independence from British rule, some might justifiably say that Indiaseems less confident about the limits – and merits – of democratic criticism and the role this plays in citizens’ compact with the state. The JNU row will subside, but the issue won’t go away.
-----

Finally, colonialism. There are differing views worldwide on net neutrality, the principle that internet service providers should enable access to all content and applications regardless of the source. But when Indian regulators banned Facebook’s “Free Basics”, a programme controversially providing free mobile internet in poor countries, it was hard not to see it as a sign of a general anxiety about unfair foreign competition with the intention to dominate.

Software billionaire Nandan Nilekani, co-founder of Bangalore-based IT group Infosys, recently admitted as much. “There is this real rising fear in Indiaabout digital colonialism,” he said.

 

[nik141993]

#India's culture wars holding country back #caste, #colonialism, #Sedition . #JNU #dalitvirodhimodi #Modi #Facebook India's culture wars are holding back progress | The National …

In just seven weeks, the new year seems to have become troublingly old for India. Three old issues with all their upsetting associations – caste, colonialism and potentially seditious dissent – are back on the news agenda. They’ve restarted some very unpleasant conversations and in such a corrosive way that there is a sense of a country deeply polarised and almost at war with itself.

In January, the suicide of a lower caste Hindu doctoral student triggered nationwide protests as well as knee-jerk official defensiveness. Last week, India’s rejection of Facebook’s free, basic internet service raised questions about the implications of its ingrained fear of foreign dominance. And a row over the right to public dissent is rumbling on. It started just days ago with a police crackdown on the campus of a leading university in the capital New Delhi.

All three events are linked in a way that goes beyond being newsworthy. They have the same pathology. All are deeply embedded in the Indian psyche, sickening the body politic and rendering debate unfit for purpose. It may be fair to say that the hold of these three issues has never really been meaningfully discussed with complete candour, in any way that would acknowledge the real difficulties of laying them to rest.

Consider the snowballing controversy over allegedly seditious activity, especially on university campuses. Last week, the head of the student union of Delhi’s Jawaharlal Nehru University was arrested for sedition, under a law that dates to British rule. This university is sometimes described as an IndianBerkeley, with a proud tradition of left-wing debate on a range of issues such as communalism, social marginalisation, market forces, nuclear disarmament and the role of religion in politics.

The student leader’s alleged offence was to organise a protest against the hanging three years ago of Afzal Guru, a Kashmiri separatist who was convicted and put to the death over a 2001 plot to attack India’s parliament. Guru always denied plotting the attack and his execution triggered protests in Jammu and Kashmir.
---
Some Indian commentators criticised the government’s response as “disproportionate” and far more insidious than an attempt to crush dissent; it “wants to crush thinking”. JNU research scholar Saib Bilaval wrote that it was “the othering of liberalism”, making it “unpatriotic” to profess liberal views. Students on other campuses have since spoken up about the right to free expression and an editorial headlined “Do not disagree” in the Indian Express newspaper thundered that the message of the JNU arrest sits uneasily with India’s overwhelmingly youthful demographic.

There has been a sharp rise in the number of sedition cases pointing to lower tolerance of dissent. More damagingly, it indicates an incomplete examination of the nature and mechanics of nation-building. In the 69th year of its independence from British rule, some might justifiably say that Indiaseems less confident about the limits – and merits – of democratic criticism and the role this plays in citizens’ compact with the state. The JNU row will subside, but the issue won’t go away.
-----

Finally, colonialism. There are differing views worldwide on net neutrality, the principle that internet service providers should enable access to all content and applications regardless of the source. But when Indian regulators banned Facebook’s “Free Basics”, a programme controversially providing free mobile internet in poor countries, it was hard not to see it as a sign of a general anxiety about unfair foreign competition with the intention to dominate.

Software billionaire Nandan Nilekani, co-founder of Bangalore-based IT group Infosys, recently admitted as much. “There is this real rising fear in Indiaabout digital colonialism,” he said.

@waz @WAJsal could you plz tell me how this post is related to topic

Before anyone dismisses anything related to Make in India program, they should read this report from UNCTAD first:

http://unctad.org/en/PublicationsLibrary/wir2015_en.pdf

and pay attention to this figure:

and consider India was struggling to attract even 30 billion in FDI under the last administration.

According to UNCTAD:

Total FDI inflow to India in USD:

2013 = 28 billion

2014 = 34 billion (Modi arrives halfway through this year)

2015 = 59 billion

2016 = ??? (It will create butthurt whatever it is )

Also this report from CII should be read to explain the basics of Make in India program:

http://www.ies.gov.in/pdfs/make-in-india-oct15.pdf

So in one year India attracted 20 billion more than the proposed 40 billion in CPEC in 10 years lol @RiazHaq you need to look at this

 

[Nilgiri]

So in one year India attracted 20 billion more than the proposed 40 billion in CPEC in 10 years lol @RiazHaq you need to look at this

Some members in this forum have said that the 45 billion CPEC investment will come by 2018 or something like that and that the further investment (10 year stretch) will be much bigger.

But we will need to wait and see how these MOU dependent projects actually turn out.

 

[nik141993]

Some members in this forum have said that the 45 billion CPEC investment will come by 2018 or something like that and that the further investment (10 year stretch) will be much bigger.

But we will need to wait and see how these MOU dependent projects actually turn out.

This 45 billion future look bleek seeing what actually happening on the ground

 

[Genesis]

Some members in this forum have said that the 45 billion CPEC investment will come by 2018 or something like that and that the further investment (10 year stretch) will be much bigger.

But we will need to wait and see how these MOU dependent projects actually turn out.

Quite a few projects have already started, and a few have already finished or near finishing. The CPEC project is a regrouping of projects to have a singular goal. More projects are being added all the time.

It's not like China said, on this date, 40 billion is going to be transferred to Pakistan. It's an on going process. Plans can change, but in the end, the goal is what it is.

 

[Dungeness]

After the successful terminologies of shining India and Incredible India.....let's see what Make in India delivers.

They was a slogan "Clean India" when Modi first took office, wondering how it turned out.

 

[Nilgiri]

Quite a few projects have already started, and a few have already finished or near finishing. The CPEC project is a regrouping of projects to have a singular goal. More projects are being added all the time.

It's not like China said, on this date, 40 billion is going to be transferred to Pakistan. It's an on going process. Plans can change, but in the end, the goal is what it is.

Yes I understand, I was just quoting what other members were saying (best case scenario).

No one gave me a projected/confirmed investment flow diagram, and the figures so far this fiscal year do not suggest any massive increase this year in FDI....so I have come to the same conclusion that it will be spread over many more years than just up to 2018 or whatever....and the total amount itself may increase or decrease depending on various factors.

Thats the whole point why most of the investment dollars remain as MOUs. Even China signed some 100 billion dollars or so of MOU when Xi Jinping visited India. It is for maximum flexibility and ROI value. Pakistan has to put in its side of the on the ground commitment to make many of these proposals agreeable to China. It is not as easy as many think it will be, neither will it be a sudden investment miracle judging by how other countries are lowering their own FDI into Pakistan.