Monday, 29 April 2024 11:32

‘Make in India’, Boost to Manufacturing and Job Creation!!! : CLAIMS Vs REALITY

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CLAIMS:

Prime Minister Narendra Modi: Production Linked Incentive (PLI) Scheme will boost manufacturing, giving opportunities to youth while making India a preferred investment destination. 

Union Minister for Commerce & Industry, Piyush Goyal: PLI revolutionising Make in India will help create jobs, promote exports & make India the factory of the world.

Nirmala Sitaraman, Union Finance Minister, Union Budget 2019-20: PLI of Rs.1, 97,291crores to the manufacturing sector over 5 years for the industries in 14 sectors shall strengthen the manufacturing sector in India, raising share in GDP to 25%, create national manufacturing champions and 60 lakh new jobs and additional production worth of 30 lakhs crores.

Claim was “the scheme shall localise manufacturing, substitute imports, transform export basket from traditional commodities to high value added products, attract investment in core competency & cutting edge technology, impact MSME’s positively”.

REALITY:

Scheme for Promotion of manufacturing Electronics Components & Semiconductors (SPECS) with Rs.76000 crores outlay provides financial incentive of 25% of the company’s capital expenditure. Tatas, Muregappa Group, Micron, and CG, multinational companies from Japan, Thailand and Taiwan setting up semiconductor plants at Sanand, Gujarat and at Assam are given Rs.59000 crores.

In addition to such direct funding, Remission of Duties or Taxes on Export Product (RoDTEP) under Merchandise exports from India Scheme (MEIS) provides for reimbursement of taxes/duties paid by the companies.

But, there are no jobs created, no import substitution, no transformation in export basket, and no investment in core competency & cutting edge technology. Only money flowed from national exchequer to private corporate to boost their profit.

MSME’s are not positively impacted. PLI approved 176 MSME’s as outsource vendors/On-Site Suppliers of Corporates reduce the cost of component production/purchase cost, doubling the PLI benefit to the Corporates.

25% of the cost of capital investment through SPECS, then cost of production through PLI & reimbursement of taxes & duties paid on exports are reimbursed through RoDTEP.

Thus, the Modi government is subsidising and directly funding private capital through an unseen pipeline in the form of the PLI and other schemes that drain the public exchequer to the Corporates. Make in India and job creation are just ‘jumlas’ to deceive the people, particularly the young who are desperately looking for jobs. It is atrocious anti national loot & plunder of public money by the big corporates.

Jobs:

There are 1000 approved companies under the Scheme but jobs in these companies have stood stagnant or decreased e.g. in Wistron(infamous for non adherence to labour statutes & violence at factory), vendor of Foxconn, contract manufacturer for Apple has only 2520 employees.

Among the PLI-beneficiaries, Automobile & Auto Components have laid off 3.5 lakhs since April 2019; Maruti Suzuki reduced its temporary workforce by about 6%. Ashok Leyland, Tata Motors, Eicher, Mahindra & Mahindra, Kia India Pvt ltd, Toyota Kirloskar, Mitsubishi –approved Original Equipment Manufacturers (OEMs) & BOSCH and other approved Auto components manufacturers for PLI have pushed the regular employees out of jobs through forced VRS and other means.

The approved beneficiaries of Food processing industries like Britannia, Parle, Anmol, Haldirams, and ITC foods, MTR foods, Hutsun and others too have not added to the number of employees.

In metals & Minerals for specialty steel approved applicants Jindal, Tata, Arcelormittal-Nippon, Bhushan, JSW, Kirloskar Ferrous, Kalyani, LLYOD no increase in employment  is visible.

But production has increased through increased productivity norms imposed on the workers.The share of contract workers has increased to 42.5% in 2022 from 13% in 2013 in manufacturing sector of India as per CMIE survey.Then where are the jobs claimed to be created/expected?

Localisation &Value Addition:

In mobile manufacturing where exports are claimed, localisation in the components manufacturing like camera module is only 25%, display assembly 25%, mechanics 20%, die cast 15% and connectors 5%. This means that the rest are imported. Value addition of mobile phones is less than 20% and in Apple Inc it is hardly 12 to 15%.

Enhancing Exports & Imports substitution:

The recent WTO’S Global Trade Outlook and Statistics report says India accounts for 1.8 % of global exports of goods. In 2023, export of goods has contracted by 4.71%. Global Trade Research Initiative (GTRI) says Indian exports & imports have dipped by 2.6% in 2023 compared to 2022.

Share in GDP:

The share of manufacturing sector in GDP which was 17% in 2010, dropped to 15% in 2014 and to 13% in 2022.

PLI & Electoral Bonds nexus:

Some of the companies which are approved applicants/beneficiaries of PLI appear in the list of purchasers of electoral bonds. Like Hetero Drugs Ltd, approved applicant under bulk Pharmaceutical drugs has purchased electoral bonds worth Rs.30 crores. Texport Industries Pvt Ltd under Textiles and several others too have purchased electoral bonds and are beneficiaries of PLI too. Not a mere coincidence but a nexus, quid pro quo - “Give Bonds Take PLI”

It is clear that the Modi led BJP government is using its control over the State to transfer public money to the big corporates and receiving corporate funds to keep itself in power. This is anti national and cannot be allowed to continue.

Use your vote. Defeat the BJP and its allies to free the country from the regime that guarantees loot & plunder by the Corporates!!

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