Vocal for Local: A big hit yet?
COVID-19 pandemic continues to impact millions of lives as the unprecedented human toll is accompanied by a deep global Economic crisis and India is no exception. But there is something exceptional about India and it is nothing but our strategy and approach for safeguarding our people and economy from the pandemic. Ever Since India made a bold move by going for a complete lockdown to break the chain, we could see a better chance for our country to get over the crisis.
The Government of India’s new campaign - “Vocal for Local” to make India self reliant gives us the hope that we will not only survive this crisis but will surpass the post COVID economy race. While addressing the nation, Narendra Modi, Prime Minister spoke about the potential of India as a huge local market and scope for India to be a manufacturing hub to take its local products global.
Our nation had envisioned a self-sufficient economy in the early ’20s with the Swadeshi Movement, to liberate our country and economy from the British rule. The same ideology got a makeover with the "Make in India" program which was a call to action to facilitate investment, foster innovation, enhance skill development, and build best in class infrastructure in the country. The primary objective of the initiative was to attract FDI from across the globe to make India a global manufacturing hub. While Make in India was more about creating a favourable environment that appeals for investors across the globe to invest and manufacture in India utilising our resource and talent base, Vocal for local is taking it to the next level.
The ultimate goal of Vocal for Local campaigns is “Atmanirbhar” (Self-reliant) which is a call not only to make in India but also to buy and promote local products made in India and also to take local products to global markets. India is likely to be the most favoured investment destination for companies across the globe as the current pandemic scenario has brought economic activity near standstill for almost every country while India being comparatively less impacted by COVID 19 crisis. The opportunity is higher so as the challenges to produce and deliver high-quality products and services that will meet the demand of global buyers.
Current status - Scope and challenges
With the Make in India program, India could manage to receive USD 51 billion in foreign investment in 2019 against USD 16 billion in 2014 to become the world's 9th largest recipient of FD ( World Investment Report 2020 by UNCTAD). But the initiative has not been completely successful in making India a global manufacturing hub, as achieving a 12- 14% growth rate, improving GDP contribution to 25% and 100 million additional jobs are still a distant dream for the manufacturing sector in India. Infrastructure constraints, lack of basic amenities, proper transportation facility and connectivity, complex policies, and administrative procedures remain as major roadblocks for enterprises to operate in our country.
Vocal for Local to overcome Make in India roadblocks
The Government of India has already started implementing policies to make land, tax, and labor laws more favourable and appealing to the business fraternity. Also, many projects are on to improve infrastructure and slash red tape to revive manufacturing and create more jobs in India. These steps and measures can facilitate ease for businesses in India to a great extent. Now the question is who will drive the initiatives.
MSMEs- the sector which generates around 100 million jobs through 46 million units across the country, which contributes 38% to the nation’s GDP , 40% and 45% share of the overall exports and manufacturing output respectively, the sector which manufactures over 6,000 products ranging from traditional to hi-tech items- is the most credible driver for India’ economic growth engine.
The added advantages of MSME’s like low capital and technology requirement, capacity to promote industrial development in rural areas, traditional or inherited skill, local resources, availability of land, mobilisation of resources, and exportability of products allow them to play a pivotal role in making India a global manufacturing hub.
Bridging the gap
Getting timely access to finance is a key challenge for Small enterprises. They are forced to depend on private money lenders who charge a very high rate of interest which makes the operating cost unbearable for MSME. Here is where we need government intervention to boost the financial strength of MSMEs by facilitating access to convenient financial services. A lot of discussions are ongoing on the need for easing the regulatory compliances of the Companies Act of 2013 for MSMEs to boost external funding for the sector.
Other challenges with marketing and selling, labor issues, unskilled workforce, limited internet literacy, and R&D should also be addressed to get the “Vocal for local” initiative successful. Suggestions are pouring in to Strengthen and consolidate the incentive structure for corporate R&D activity in the country to improve the international competitiveness of the national enterprises. It is an interesting fact that around 70 percent of India's economy constitutes family-run businesses, be it small Kirana stores or large conglomerates. The Vocal for local is expected to take it to the next level with our homegrown brand gaining acceptance in both domestic and global markets to make India an ‘Atmanirbhar Bharat’.
- Media Sources
- Exploring-Prospects-for-Make-in-India-and-Made-in-India-A-Study.- PHDCCI
- World Investment Report 2020 by UNCTAD
- Financing Constraints for MSME Sector”- Abhijeet Biswas