Introduction
In the face of global competition and domestic economic aspirations, the Government of India launched two transformative initiatives—Make in India in 2014 and Start-up India in 2016. Both programs reflect India’s ambition to accelerate manufacturing, create employment, and establish a robust innovation ecosystem.
Make in India focuses on reviving the manufacturing sector by attracting investments, simplifying regulations, and building infrastructure. Conversely, Start-up India aims to promote entrepreneurship, nurture innovation, and make India a start-up nation through policy reforms and financial incentives.
Together, these initiatives represent India’s strategic approach to inclusive growth, skill development, and global economic integration. This blog explores the comprehensive dimensions of both initiatives in detail.
1. Make in India Initiative
1.1 Background and Rationale
India’s manufacturing sector historically lagged behind its service sector, contributing approximately 16-18% to GDP compared to 25-30% in developed countries. The need to create jobs for millions of youth entering the workforce annually, reduce dependence on imports, and enhance export competitiveness led to the launch of Make in India on September 25, 2014.
1.2 Objectives
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Boost Manufacturing Growth: Increase the manufacturing sector’s contribution to GDP from 16% to 25% by 2025.
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Create Employment: Generate millions of jobs through industrial expansion and value chain development.
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Attract Investments: Facilitate domestic and foreign investments with a focus on ease of doing business.
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Promote Innovation: Encourage technology adoption and indigenous product development.
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Global Competitiveness: Position India as a global manufacturing hub and export powerhouse.
1.3 Key Features
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Sectoral Focus: The initiative targets 25 key sectors including automobiles, electronics, pharmaceuticals, textiles, defense manufacturing, and renewable energy.
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Ease of Doing Business: Streamlined procedures, single-window clearances, reduced compliance burden, and online portals to facilitate approvals.
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Investment Promotion: Roadshows, international partnerships, and digital campaigns to attract global investors.
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Infrastructure Development: Creation of industrial corridors, smart cities, and Special Economic Zones (SEZs) to support manufacturing clusters.
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Skill Development: Collaboration with Skill India to enhance workforce capabilities aligned with industry needs.
1.4 Implementation Mechanism
The government established a Make in India action plan with involvement from ministries, state governments, and private stakeholders. The Department for Promotion of Industry and Internal Trade (DPIIT) spearheads the initiative, monitoring progress through dashboards and stakeholder consultations.
1.5 Impact and Achievements
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Increase in FDI: FDI inflows into manufacturing sectors have increased substantially, with countries like Japan, South Korea, and the USA showing heightened interest.
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Job Creation: New manufacturing units and expansions have generated millions of jobs, though not yet at the targeted scale.
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Global Recognition: India improved its global ranking in the World Bank’s Ease of Doing Business report due in part to reforms under Make in India.
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Sectoral Growth: Industries such as electronics and defense manufacturing witnessed significant capacity additions and exports growth.
1.6 Challenges
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Infrastructure Bottlenecks: Despite efforts, gaps in logistics, power supply, and connectivity persist.
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Regulatory Complexities: State-level variations and remaining procedural hurdles affect investor confidence.
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Skill Gap: The shortage of adequately skilled workers continues to constrain manufacturing productivity.
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Global Competition: Competing with countries like China and Vietnam requires sustained innovation and cost competitiveness.
2. Start-up India Initiative
2.1 Background and Rationale
Recognizing the critical role of start-ups in innovation, economic diversification, and employment, the Government of India launched Start-up India on January 16, 2016. The initiative seeks to create an ecosystem that supports start-ups throughout their lifecycle—from ideation to scaling.
2.2 Objectives
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Foster Innovation: Encourage development of innovative products and services addressing domestic and global needs.
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Simplify Regulatory Framework: Ease business registration, compliance, and taxation for start-ups.
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Promote Entrepreneurship: Support entrepreneurs through funding, mentoring, and incubation.
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Job Creation: Generate employment opportunities by nurturing new ventures.
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Build a Supportive Ecosystem: Develop incubators, accelerators, and networks to facilitate growth.
2.3 Key Features
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Simplified Compliance: Self-certification under labor and environmental laws, and exemption from certain inspections.
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Easier Registration: Online single-window portal for start-up registration and recognition.
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Tax Benefits: Tax holiday for three consecutive years within the first seven years, and exemption from capital gains tax.
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Funding Support: Establishment of a ₹10,000 crore “Fund of Funds” managed by the Small Industries Development Bank of India (SIDBI) to provide venture capital.
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Startup India Hub: A central platform offering mentorship, networking, and resources.
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Intellectual Property Rights (IPR): Fast-track patent examination and reduced fees to encourage innovation protection.
2.4 Implementation Mechanism
The initiative is overseen by the Department for Promotion of Industry and Internal Trade (DPIIT). States have launched their own Start-up policies aligned with the central scheme. Partnerships with private incubators, academia, and industry bodies facilitate support services.
2.5 Impact and Achievements
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Growth in Start-ups: India emerged as the third-largest start-up ecosystem globally with over 70,000 recognized start-ups.
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Unicorns and Innovation: Numerous start-ups reached unicorn status, driving innovation in fintech, healthtech, edtech, and e-commerce.
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Employment Generation: Start-ups contributed significantly to formal and informal job creation.
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Global Investments: Increased foreign venture capital inflows and cross-border collaborations.
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Inclusive Entrepreneurship: Initiatives focused on women entrepreneurs, rural innovation, and tier-2 and tier-3 city participation.
2.6 Challenges
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Access to Capital: Early-stage funding and angel investments remain limited in certain sectors and geographies.
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Scaling Issues: Many start-ups struggle to scale due to market fragmentation and competition.
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Regulatory Barriers: Despite simplifications, some regulatory processes still pose hurdles.
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Skill Shortages: Talent acquisition and retention remain key challenges for start-ups.
3. Synergies Between Make in India and Start-up India
Both initiatives complement each other in multiple ways:
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Innovation Meets Manufacturing: Start-ups develop innovative technologies that can be commercialized under the Make in India manufacturing umbrella.
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Job Creation: Combined focus on manufacturing expansion and entrepreneurship drives employment.
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Investment Attraction: Liberalized policies and ease of doing business appeal to investors across both manufacturing and start-up sectors.
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Skill Development: Collaboration enhances skill training relevant to industrial and digital economy needs.
4. Conclusion
Make in India and Start-up India initiatives embody India’s vision of transforming its economy through industrial growth and innovation-led entrepreneurship. Make in India strives to build a resilient manufacturing base, while Start-up India nurtures a vibrant start-up ecosystem. Both have achieved notable successes in investment attraction, employment generation, and global competitiveness.
However, to fully realize their transformative potential, India must address infrastructural deficiencies, skill gaps, and regulatory complexities. A sustained, integrated approach leveraging technology, policy reforms, and stakeholder collaboration will ensure these initiatives contribute robustly to India’s economic development and global stature.