'Make in India' campaign comes back as Modi Govt readies for Budget 2017

The Government of India (GOI) has brought back its 'Make in India' campaign ahead of Union Budget 2017 scheduled to be tabled in parliament on Wednesday February 1, 2017. 

'Make in India' was a key theme of Prime Minister Narendra Modi's policy to attract global investments into India and progress the country towards a manufacturing hub. 

PM Modi's foreign visits over the past two years have exclusively focused on marketing India as a perfect destination to set up factories. The government rightly believes that manufacturing has to grow if India has to attain GDPs of 8% and above. 

However, the message of 'Make in India' drowned over the cacophony of noise, including demonetisation, over the past few months. 

With a sustained campaign targeting national media, PM Modi is trying to bring focus back on manufacturing in India just before Budget 2017. 

However, since the beginning of this fiscal, growth in India's manufacturing sector measured by the Index of Industrial Production (IIP) has been volatile. 

IIP rose sharply in November 2016 to 5.7% after a negative 1.8% growth recorded in October, on account of favourable base effect.

source: tradingeconomics.com

For the first five months of current fiscal FY17), i.e. April to August 2016 period, IIP's cumulative growth declined by 0.3%, which was quite low from 4.1% in the corresponding period of the previous year.

source: tradingeconomics.com

Furthermore, Manufacturing GDP grew at the slowest rate since last June, in the recent September quarter.

Also at the aggregate level, Capacity Utilization of India recorded seasonal drop in Q1FY17 over the previous quarter and stood at 72.9%. The level, however, was higher than those recorded in the same quarter of previous three years. 

Before demonetisation, Philip Capital said, " Better‐than‐expected IIP data will augur well for our FY17 GVA expectation at 7.8%, which we believed were at risk after last month’s data. This would be because of 7th Pay Commission, festive season and normal monsoons. "

Table's turned when demonetisation led to cash crunch, estimates changed drastically for everything especially India's GDP growth. 

After factoring in demonetisation impact, analysts estimates gross value added (GVA) growth at 6.4%. 

From the GVA estimates, manufacturing is projected to be down to 6.5% from  9.3% of 2016 estimates. And that of industry is also expected to be near 5.3% from 5.4% of 2016 estimates. 

Is the government hinting at renewed focus on manufacturing in India by reviving its 'Make in India' campaign?