Four charts that explain why 2015 was not a breakout year for Make in India

This piece originally appeared on Livemint.com

 

From pledges to proposals to projects is a long journey. In September 2014, Prime Minister Narendra Modi made the call to manufacturers to ‘Make in India’. While companies are publicly expressing greater belief in this idea of India as a preferred manufacturing location, backing it with investment pledges to the tune of Rs.15 trillion during the Make in India week earlier this month, government data on two measurable actions related to setting up new industrial units shows 2015 was not a breakout year.

OVERALL | According to various metrics proposed or implemented, the numbers in 2015, the first full year of the ‘Make in India’ campaign, dipped marginally or stayed flat over the average of the previous years.

 

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BY INDUSTRY | Ten industries accounted for 65% of the projects implemented. Among these, textiles and food processing registered notable gains, while metallurgical industries and chemicals, other than fetilizers, took a hit.

 

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BY STATE | Ten states accounted for 80% of the projects proposed. Among these, only Chhattisgarh showed a surge in proposals, though not in value terms. On the implementation front, four the 10 states showed a jump, namely Madhya Pradesh, Andhra Pradesh, Karnataka and Rajasthan.

 

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News in numbers, Feb 3, 2016: India’s borrowing plans for irrigation, Whatsapp’s billion users…

 

Rs 86,000 crore

What is it? Amount India plans to raise by way of overseas loans to fund irrigation projects.

Why is it important? It will add 1.3 crore hectares of irrigated farmland. India has witnessed back-to-back droughts affecting its crop production and threatening to turn it into a net importer of some commodities.

Tell me more: The Indian government is likely to approach the World Bank, Asian Development Bank and state-owned foreign banks for loans with tenures of as much as 25 years. The government-run National Bank for Agriculture and Rural Development is likely to take the lead in the borrowing programme.

 

Rs 5,300 crore

What is it? Amount Sahara Group plans to raise by selling some of its assets to help free its jailed chief Subrata Roy.

Why is it important? This is about 15% of the money (Rs 36,000 crore) it has to refund its investors for a time-deposit scheme declared illegal. The group expects to sell the Sahara Star Hotel, its stake in the Formula One racing team to raise Rs 3,000 crore and the rest by selling of three of its overseas properties.

Tell me more: The Supreme Court was expected to take a decision on the appointment of a receiver to auction off some of the group’s properties on Tuesday. The hearing has now been deferred until March 29. The bail amount for Roy’s release was fixed at Rs 10,000 crore.

Rs 1.14 lakh crore

What is it? Investment commitment by electronic manufacturing firms such as LG, Samsung and Foxconn in India in the last 20 months.

Why is it important? Shows global firms’ interest in Indian government’s ‘Make in India’ programme, partly driven by the government’s incentive scheme for companies setting up electronics manufacturing facilities here. It remains to be seen if all the 156 proposals materialise.

Tell me more: The Indian Electronics Systems Design and Manufacturing industry was estimated to be worth $68 billion in 2012 and was projected to increase to $94.2 billion in 2015 at a compounded annual growth rate of 9.9% between 2011-15.

 

1 billion

What is it? Number of users Whatsapp has now, more than double of those using the service when it was acquired by Facebook two years ago.

Why is it important? Whatsapp rivals – Viber and WeChat (along with its Chinese version) – have 400 million users and 650 million monthly active users. However, in terms of monetisation, WeChat’s average revenue per user at $7 is way higher than Whatsapp’s $1.

Tell me more: Facebook reached this target in 2012 and six months ago, 1 billion users logged in on a single day. Facebook acquired Whatsapp for $22 billion in 2014, justifying the price saying it has the potential of reaching 1 billion users. “The global SMS-system does around 20 bn messages a day. Whatsapp is now doing 42 bn. With 57 engineers.” –@BenedictEvans

 

131

What is it? India’s consumer confidence index in the fourth quarter of 2015, according to a Nielsen survey.

Why is this important? India has been on the top of this index for four quarters in a row now. In terms of job prospects and personal finances, Indians were found to be the most optimistic in the world with 80% and 82% of the respondents (respectively) in India said they were confident of these attributes. However, 50% of the polled Indians said the country is in an “economic recession”, meaning the recessionary sentiment is felt strongly.

Tell me more: Consumer confidence index of China, which posted its lowest economic growth numbers in 25 years recently, increased by one point to 107 in the last quarter of 2015.

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News in numbers, Jan 5, 2016: Global markets tumble, Tamil Nadu floods’ death toll…

 

7%

 

What is it? Fall in Chinese stock markets on the first trading day of the new year.

 

Why is it important? Investor concerns about weak demand and oversupply in China led to its indexes tumbling 7% and subsequently, halted. After the first 15-minute trading halt (when China’s CSI 300 Index fell 5%) was lifted, it took just seven minutes for trading to be completely suspended for the day. The Chinese crash had a ripple effect on global stock markets including India’s indices (BSE’s 30-share Sensex and National Stock Exchange’s 5-share Nifty), which fell by over 2%.

 

Tell me more: A Chinese slowdown could have a downward impact on commodities, whose prices have been falling in the last two years or so. This has raised fears of a global economic meltdown.

 

470

 

What is it? Number of deaths between October 28 and December 31 last year in flood-related incidents in Tamil Nadu, according to the Tamil Nadu government.

 

Why is it important? This number is much higher than earlier estimate of 347 deaths in three districts – Chennai, Kanchipuram and Tiruvallur – from floods caused by record rainfall. Breakdown of state machinery and rampant encroachment on traditional water bodies that stored excess rain water were cited as reasons for high death toll.

 

Tell me more: The northeast monsoon has also damaged crops in over 3.83 lakh hectares, about 8.1% of the net area sown (as recorded for 2013-14) in Tamil Nadu. Net area sown is the total area of land used to grow crops in a year and if the same area is used more than once to grow crops, it is still counted only once during the entire year.

 

49.1

 

What is it? Nikkei’s Manufacturing Purchasing Managers’ Index (PMI) in December 2015, a composite indicator of India’s manufacturing activity (based on a survey). It has contracted for the first time in over two years (28 months). In November 2015, this was 50.3.

 

Why is it important? Revival in manufacturing is a key part of ‘Make in India’ strategy to achieve high growth rate and employment. Continued weakness in manufacturing, which accounts for 16% of GDP, will delay revival.

 

Tell me more: If the PMI is above 50, it indicates growth and if it is below 50, it indicates contraction. The PMI recorded in December was below the 50 threshold, the first time since October 2013.

 

3 lakh

 

What is it? Increase in Delhi Metro’s ridership on Monday compared to a week ago.

 

Why is it important? Reflects Delhi Metro Rail Corporation’s (DMRC) ability to handle additional commuters on the first working day in the ongoing car-rationing experiment. However, pollution levels saw an increase in eight monitoring stations due to weather conditions including calm winds and high moisture content.

 

Tell me more: During the implementation of the scheme (January 1-15), DMRC will use 198 trains to make a total number of trips of 3,192to carry 32 lakh passengers per day.

 

1-2%

 

What is it? Decrease in liquor sales in India between April and November 2015.

 

Why is it important? This is the first fall in 15 years. And, could be due to less new brand launches, high taxes, and slow economic growth. But it’s good news from the public health perspective as increased alcoholism is taking a toll, especially on poor and rural households. According to a World Health Organization report, about 30% of India’s population consumed alcohol in 2010 and over 11% indulged in heavy drinking.

Tell me more: The average rural Indian consumes 11.4 litres of alcohol in a year while the average urban person consumes 5 litres annually. Since the early 2000s, India saw an increase of 10-15% in volumes but in 2013-14 and 2014-15, the growth was in low single digits.

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News in numbers, Oct 6, 2015: Indo-German trade, impact of China on Asian countries…

18

What it is: Number of Memorandums of Understanding (MoUs) signed between India and Germany on Monday

Why is it important: A sign that things are getting better. Trade relations between India and the European Union (EU) have been cold since India cancelled a meeting with the latter’s trade negotiators to protest the ban of its 700 generic drugs for alleged manipulation of clinical trials. Now, Asia’s third largest economy and the world’s fourth largest economy have agreed to resume talks towards a free trade agreement between India and the EU. But, India still hopes the issue of the generic drugs is viewed “fairly and sensibly” by the EU.

Tell me more: Germany has agreed to provide $2.25 billion for developing a clean energy corridor and solar projects in India. Among the MoUs signed, the two countries have signed a deal where India would fast-track business proposals making it easier for German companies to operate in India. Germany was the 7th largest contributor to foreign direct investment in India in 2014-15 and bilateral trade between the two was nearly $18 billion in 2014.

 

0.3%

What it is: The impact of China on other Asian countries. It’s estimated percentage point decline in the growth of other Asian countries if there is a 1 percentage point decline in Chinese growth, according to the International Monetary Fund (IMF).

Why is it important: This contrasts with the view that the Chinese economic slowdown is actually good for India. This counter-view suggests India is more likely to get affected by the Chinese market meltdown indirectly (due to its effect on global markets) rather than directly. The Indian government is trying to attract global investors to ‘Make in India’, sensing an opportunity as China tries to make a shift from a manufacturing/export-led economy to a consumer-driven one.

Tell me more: In a recent report, the World Bank said India is the “least vulnerable” among emerging economies even as the world goes through a period of volatility. Further, it added that as China eases into an “environment of lower growth”, India could “durably occupy the top spot among large emerging markets”. The Indian government said on Monday it is confident of the economic growth exceeding 7.5% in 2015-16.

 

9.6%

What it is: Percentage of world population in exreme poverty by end of 2015 according to World Bank.

Why is it important: In 2012, it was 12.8%. The latest number shows both the progress and the distance to cover. United Nations wants to end extreme poverty by 2030.

Tell me more: Sub-Saharan Africa is the poorest with 35.2% of population in extreme poverty. For South Asia, it is 13.5%. “Reliable current poverty data is not available for the Middle East and North Africa because of conflict and fragility in key countries in the region,” World Bank said. The report places India’s poverty levels at 12.4% for 2012.

 

58%

What it is: Tamil Nadu’s share in total number of detenus under preventive detention laws in 2014, according to the National Crime Records Bureau (NCRB). The state had 1,892 of 3,237  detenus.

Why is it important: It’s off the charts. Such metrics often raise questions about excessive use of police force. Besides, nearly half (47%) of them are illiterates and 53% Dalits (not mutually exclusive).

Tell me more: Gujarat and Karnataka figured in the second and third slots with 594 and 204 detenus respectively. Interestingly, 11 states including Haryana, Kerala, Odisha and Punjab have recorded zero detenus in 2014.  

 

Rs 2.5 lakh

What it is: The new tuition fee for graduate and post-graduate programmes at the Indian Institutes of Technology (IITs) per student a year proposed by the IIT Council.

Why is it important: If implemented, this would perhaps be the steepest hike of fees in the history of the IITs. Currently, students enrolled for the bachelors programme pay around Rs 90,000 a year. Also, this narrows the gap between IITs’ spend per student (Rs 3.5 lakh) and the fees students pay.

Tell me more: IITs, which meet 80% of their expenses through financial grants from the Indian government, waive 90% of the tuition fees for 22% of the students from the Scheduled Castes/Tribes and 25% of the students whose parents’ annual income is less than Rs 4.5 lakh per annum. In January 2013, the annual tuition fees at the IITs was increased by Rs 40,000 to Rs 90,000.

 

 

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