Consumption demand is slowly picking up evident from the fact that sales of commercial vehicles of have improved. Monsoon has however been playing truant but so far it has been reasonably good belying expectations of monsoon failure this year. But one has keep the fingers cross as monsoon could still play the spoil sport. The government is however fully geared to meet the situation in the event of a failure as food grain stocks are adequate and falling global commodity prices will help in the event of agri-products. The foreign exchange reserves are swelling and current account deficit is below one per cent of GDP making balance of payments situation comfortable unlike in the past years during drought.

Exports are still not doing well in the face of recessionary trends in advanced economies particularly Europe. But limited opportunity for investment there and China which has pursued export-led growth offering not much opportunity for investment, India has become most favoured destination for foreign investments.

It is no surprise therefore that India is now ranked at the top for investment among 110 countries in the World. It was ranked sixth in 2014 and it moved five places this year to dethrone Hong Kong, which occupied the best ranked destination for investment in that year.

Even country like in China, considered as a miracle economy clocking double-digit GDP growth on a sustained basis for three decades has placed China in 65th position and ever green economy United States i n 50th position this year.

With investors better protected, ease of doing business improving considerably and political stability under Modi, the situation is expected to only improve further for foreign investors. There are already signs increased flow of foreign investment in the country. Indian attracted $35 billion in 2014-15, a record in recent years after the global economic crisis of 2008. China, which used to attract foreign investment to the tune of $120 billion annually has started slowing down and those investors are knocking at the doors in India because this is the only country with huge market with over 400 million middle class. This middle class is likely to grow further with more than half of 1.2 billion population below the age of 35.

Raising of FDI caps in Insurance, Pension, Defence and realty by Modi government besides easing of FDI norms in several other sectors has ensured several enquiries and billions of dollars of investment commitment from countries like China, Japan, France, Canada and Germany particularly in infrastructure development including energy sector. This would only further improve foreign investment flows into India. The defence sector has already shown several investment proposals particularly from France, Germany, United States, Russia, Britain and Israel. The investment in defence sector will have spin off in auto and aviation sectors in the country as well where India is already attracting foreign investors.

But India still has a lot of catching up to do as its gross domestic product in absolute terms is just about $2 trillion as against China's a little over $10 trillion. Even if India achieved a 10 per cent growth rate on a sustained basis in the coming decades, it would take 4-5 decades to come to anywhere close to China.

The make in India campaign at this juncture is certainly a master stroke pf Modi government to ensure the country becomes a major global manufacturing hub and reverse what has come to be described as jobless economic growth during UPA government.

The major economic issues faced by the country is the heavy pressure on farm land primarily because nearly 60 per cent of India's 1.2 billion population depended on agriculture, which accounted for just 15 per cent of GDP. If this surplus labour in farming, who are described by developmental economists as disguised unemployed or in other words under-employed, had to be gainfully employed then it is manufacturing sector that will provided the answer. Every year 10 million people enter job market in the country and with more than half the population below 35 years of age, 300 million people will enter work force in the next decade or two.

Only manufacturing and services sector can absorb them. Services sector is already growing at a desired pace in the last decade or two but it the manufacturing, which is a laggard that needed to fixed. So Modi has his fingers in the right pie.

China has done it in the past, so also several other miracle economies of East Asia and SouthEast Asia, which are now the global manufacturing hubs taking advantage of their abundant workforce and cheap labour. India's manufacturing sector, which accounted for some 20 per cent of GDP some decades ago has slipped to 15 per cent in recent years. The make in India campaign launched by Modi last year is aimed at taking the share of manufacturing in GDP to 25 per cent.

As DIPP Secretary Amitabh Kant said exciting times are ahead from economic growth and development standpoint with number of 'remarkable initiatives' taken by the government to improve the business environment, which was making India a pre-eminent destination of foreign direct investment. The ‘MAKE IN INDIA’ initiative was launched in September end last year is designed to facilitate investment, foster innovation, protect intellectual property, and build best-in-class manufacturing infrastructure, Kant said.

Besides focus on enabling manufacture, major initiatives have been taken in 2014 for improving the ‘EASE OF DOING BUSINESS’ in India through simplification and rationalization of existing rules and the introduction of information technology to make governance more efficient and effective, Kant said

Skill development is very crucial, which would require a lot of spending by the government and hence it is getting the due priority. In India only12 per cent of the population are skilled unlike in South Korea, Japan and Germany where 80 per cent of the population are skilled. These are important statistics as it indicated India has lot of catching up to do in skill development if it had to become a major manufacturing hub. China invested heavily in education and health enabling its workforce to acquire adequate skill before the economy opened up. This ensure adequate skill labour was available in the country when Chine opened its flood gates to foreign direct investments. In the 1980s. Today China attracts $120 billion of FDI annually as against India's $35 billion. Apart from FDI policy liberalisation, which has already been done by Modi government in various sectors, skill development required emphasis and that’s why it is a focus area of the government.

Another area that required emphasis is hi-tech manufacturing. With labour cost increasing in China, many low technology manufacturing are shifting to countries like Bangladesh, Vietnam and to some extent India. India should o advantage of this development but more importantly the trend now is to many hazardous, monotonous and difficult manufacturing jobs are done by robots, which does the job faster with great precision. India, which has an advantage in robotics needed to lay emphasis so that we take advantage of this global trend to leapfrog in manufacturing just as we did in the IT sector in the last two decades.

Export oriented growth model adopted by China was good for rapid growth. But the present global situation might not have the appetite another major country to go whole hog on this model. So need for India is a combination of export-led as well as domestic-led model. The government therefore is on right track to adopt a model that will spur growth through pushing domestic demand as well as exports. The massive spend on infrastructure, $1 trillion, in the next five years will push domestic demand in the face of large scale employment and encourage more foreign investment flow into manufacturing. This is a win-win situation that will give necessary momentum for the successful. (IPA Service)