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 2, 2016: India’s rising food imports, proposed fee hike for IIT students…

 

51.1

What is it? Nikkei’s Manufacturing Purchasing Managers’ Index (PMI) in January, a composite indicator of India’s manufacturing activity based on a survey by Markit, a financial information and services company.

Why is it important? This has jumped to a four-month high after touching the lowest in 28 months in December (49.1). This is also above the 50-level threshold, an indication that manufacturing, which accounts for 16% of India’s gross domestic product (GDP), could be on the revival path. This strengthens the expectation that the Reserve Bank of India will keep key rates unchanged on Tuesday when it announces its sixth bimonthly monetary policy review.

Tell me more: The new export orders sub-index increased to 52.5 in January from 51.5 in December, the highest in five months.

 

2.6%

What is it? Increase in global corn prices since January 13.

Why is it important? An impact of India importing corn for the first time in 16 years. It has announced plans to buy half a million tonnes, and according to traders, might import 1.5 million to 2 million tonnes of corn. Two consecutive droughts and growing demand from India’s 1.25 billion population is likely to force India to import other commodities such as lentils and oilmeals. This is likely to transform the country into a net importer of some of the commodities for the first time in years. India needs to step up investment and other measures to ensure agriculture grows at a faster pace than the 2% recorded in the first half of 2015-16.

Tell me more: Agriculture accounts for around 13% of India’s GDP and two-thirds of the country’s population depend on it for their livelihoods.

 

Rs 3 lakh

What is it? The proposed annual fee hike for the students of the Indian Institutes of Technology (IITs) by a committee of the institutes’ directors. This would be over a threefold increase from the current Rs 90,000 annual fees charged per student.

Why is it important? The fee hike is one of the two main measures suggested by the panel to provide greater financial autonomy to the IITs and is enough to cover the salary and maintenance costs. The other suggestion is to create a non-banking financial company (NBFC) with a corpus of Rs 2,000 crore, which would offer interest-free loans to students (from IITs and other higher education institutes) for projects and research infrastructure.

Tell me more: These proposals are being considered and could be part of the budgetary announcements later this month.

 

4

What is it? Total number of public health emergencies declared by the World Health Organization (WHO) so far, the latest one being the Zika virus.

Why is it important? There is no treatment or vaccine for the virus, which is suspected to cause birth defects (microcephaly) where babies are born with abnormally small heads, underdeveloped brains and usually die young. Though the virus (caused by the same mosquito as dengue) has spread in 24 countries in the Americas region, one-third of the world’s population lives in areas at risk of dengue infection (Africa, India, Southeast Asia and Latin America).

Tell me more: Brazil, the worst affected nation, has reported over 3,700 cases of microcephaly and according to the country’s health minister, in 80% of the infected people, there were no symptoms. It has reported at least 1.5 million cases of Zika infection. Elsewhere, Tata Motors is now considering changing the name of its new small car, Zica for fear of the negative association with the virus.

 

~$568 billion

What is it? Valuation of Alphabet, Google’s parent company.

Why is it important? Alphabet is the most valuable traded company in the world today, dislodging Apple ($535 billion) from that position. This is not the first time, though. Google was ahead of Apple in 2010. This comes after Alphabet announcing its fourth quarter earnings where it posted a profit of $4.9 billion from $4.7 billion a year ago.

Tell me more: This is the first time the company has given separate figures for its Google business (includes search engine and YouTube) and “Other Bets” businesses (include experimental projects such as self-driving cars, internet balloon programs). The latter posted an operating loss of $3.6 billion and revenue of $448 million in 2015. Google’s revenue in 2015 was $74.5 billion while its operating income increased by 23% to $23.4 billion.

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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, Dec 9, 2015: Job creation numbers, India’s missing women and children…

 

43,000

 

What is it? Net fall in jobs in textiles, automobiles, leather, metals, gems and jewellery, transportation, information technology/business process outsourcing (IT/BPO) and handloom/powerloom sectors in the April-June quarter this year, compared to the previous quarter, per quarterly employment survey.

 

Why is it important? This is a four-quarter low for job creation in manufacturing and export-oriented sectors. Despite a 7% GDP growth recorded in the first quarter of 2015-16, dismal job creation numbers show economic recovery is slower than expected and still has a long way to go.

 

Tell me more: Automobiles and textiles and apparels reported the largest decrease in jobs in the April-June 2015 quarter: 18,000 and 17,000 respectively.

 

1.35 lakh

 

What is it? Number of missing women in India as of November 30, 2015, as per government records.

 

Why is it important? That is an increase of 41% from nearly a year ago. Trafficking of women and children for various purposes such as for domestic help, forced marriages, sexual exploitation, forced labour, begging rackets and stealing of organs, is a major problem in India. According to non-governmental organisation, Prajwala, which had moved the Supreme Court against trafficking of women and girls, as many as 200,000 women and children are inducted into the flesh trade every year.

 

Tell me more: The number of missing children as of November was 61,000, an increase of 34.5% from December 2014. The Indian government has approved the setting up of 150 specialised investigative units on crimes against women in states and union territories on a 50:50 fund sharing basis.

 

Rs 1,427 crore

 

What is it? The amount Flipkart India and Flipkart Internet borrowed from banks by pledging their assets in the August-October period this year.

 

Why is it important? High growth companies such as Flipkart tend to avoid debt, because it comes with interest costs, and other risks related to default. Instead, they go for venture capital funding. In fact, Flipkart has raised $3.2 billion since inception – and over 80% of it in the last two years.

 

Tell me more: Flipkart India and Flipkart Internet reported a loss of Rs 2,000 crore in 2014-15, three times the loss it posted the previous financial year.

 

Rs 65-70 crore

 

What is it? The amount the two new Indian Premier League franchisees for Pune and Rajkot will forego from the central pool of the league’s revenue to be a part of IPL.

 

Why is it important? Shows the intensity of competition for the franchise. In fact, New Rising Promoters and Intex Technologies would be paying BCCI Rs 16 crore and Rs 10 crore respectively, per year for the teams. Power utility CESC Ltd chairman Sanjiv Goenka’s New Rising won Pune by bidding minus Rs 16 crore while mobile phone maker Intex Technologies got Rajkot by bidding minus Rs 10 crore. In a reverse bidding process by the Board of Control for Cricket in India (BCCI), the companies that bid for the lowest amount to be received from the central pool for the teams, are declared winners.

 

Tell me more: These two teams would replace Chennai Super Kings and Rajasthan Royals for two years.

 

Rs 5,000

 

What is it? Flight ticket prices (starting range) to fly from Mumbai to Goa between December 20 and January 1.

 

Why is it important? This is half of the ticket prices that reigned five years ago between the same sectors. And, Goa is one of the busiest places to holiday in Christmas/New Year season. Fuel prices at a near seven-year low and increase in capacity have led to this drop.

 

Tell me more: The average airfare between the New Delhi-Mumbai sector in December 2015 is Rs 4,984 compared to Rs 5,581 in 2010.

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