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There is no substitute for an industrial policy

  • Published
    27th Dec, 2023

Context:

PLI is good for high-end manufacturing, but industrial policy is best bet for mass job creation.

Make in India vs. Historical Policies

  • Divergence from Past Policies: Make in India contrasts with 1970s self-sufficiency dogma, avoiding protectionist measures.
  • Concerns of Protectionism: Fears arise over tariff hikes in some sectors, reminiscent of 1970s protectionist tendencies.
  • Need for Caution: Protectionist history caused shortages and rent-seeking; calls for careful implementation of Make in India.

Examination of Make in India's Objectives

  • Core of Make in India: Launched in 2014 to boost manufacturing, transform India into a global export hub.
  • Derivatives of Make in India: Made in India and Make for India exist, but MII remains fundamental.
  • Critical Questions: Scrutiny needed on how MII is sold to the public and if it fulfills promised objectives.

Evaluating Industrial Policy and Job Creation

  • Industrial Policy Impact: New Industrial Policy 2023 put on hold; PLI aims to attract investments and ensure efficiency.
  • Need for Articulation: Industrial policy required for job creation, particularly in a labor-abundant country.
  • Importance of Data: Lack of frequent and detailed PLI data hinders scrutiny; need for policies promoting labor-intensive manufacturing.
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