New initiatives ‘Make in India’ and ‘Clean India Mission’ have geared up the socioeconomic feature of the country. Increasing CSR funds and new FDI inflows have been channelized to boost the country’s infrastructure. Suprita Anupam finds out the new market segments coming out of the investments made / being made under these initiatives.
The announcement was followed by three big initiatives: Clean India, Digital India and Make in India. The trio together are the biggest steps ever taken by an Indian PM. This is just the beginning. The foundation is laid. The three schemes are aimed to change the image of India as a country; aimed to cater to the three different segments – Cleaning & Hygiene, IT/ITeS and Manufacturing – and boost the country’s infrastructure manifold.
While professionals and entrepreneurs from all other segments are juxtaposing the developments in their perspectives, the cleaning industry is among the few sectors that are benefitting directly by the Clean India Campaign and also find its market in the other two segments.
Under the Make in India initiative, the government has taken a series of measures to speed up FDI and local investments in India. “We want the Indian companies to shine as MNCs. This is your country, the happiness of succeeding here and then taking it abroad has its own taste,” said Modi while launching the Make in India. The initiative will ease the access of doing business in India.
The ‘Make in India’ programme was launched globally on September 25, 2014 with 25 thrust sectors and a dedicated portal with back end support up to Sectoral and State levels for facilitation was created. The initiative was simultaneously launched in the Capital of all States and in several Indian Embassies/High Commissions. Few other Indian Embassies have also organized “Make in India” interactions after the launch.
The ‘Make in India” initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also in other sectors. The four pillars are:
New Processes: The programme recognises ‘ease of doing business’, as the single most important factor to promote entrepreneurship. A number of initiatives have already been undertaken to ease business environment. The aim is to de-license and de-regulate the industry during the entire lifecycle of a business.
New Infrastructure: Availability of modern and facilitating infrastructure is a very important requirement for the growth of any industry. The Government intends to develop industrial corridors and smart cities to provide infrastructure based on state-of-the-art technology with modern high-speed communication and integrated logistic arrangements. Existing infrastructure will be strengthened through upgradation of infrastructure in industrial clusters. Innovation and research activities are supported through fast paced registration system and accordingly infrastructure of Intellectual Property Rights registration set-up has been upgraded. The requirement of skills for industry are to be identified and accordingly development of workforce to be taken up.
New Mindset: Industry is accustomed to see Government as a regulator. ‘Make in India’ intends to change this by bringing a paradigm shift in how the Government interacts with industry, as a partner in economic development of the country now. The approach will be that of a facilitator and not regulator.
An Investor Facilitation Cell has been created for ‘Invest India’ to guide, assist and handhold investors during the entire lifecycle of the business. This Cell will provide necessary information on vast range of subjects; such as, policies of the Ministries and State Governments, various incentive schemes and opportunities available, to make it easy for the investors to make necessary investment decision. Information on 25 sectors has been put up on
‘Make in India’s web portal (http://www.makeinindia.com) along with details of FDI Policy, National Manufacturing Policy, Intellectual Property Rights and Delhi Mumbai Industrial Corridor and other National Industrial Corridors.
Business Made Easy
- 100% FDI is allowed in all the sectors except space (74%), Defence (49%) and News Media (26%)
- 100% FDI in railways infrastructure which was zero earlier
- An exemption from basic custom duty will be provided for the manufacture of lithium ion battery packs for supply to manufacturers of hybrid and electric vehicles.
- Foreign equity caps in various sectors were relaxed
- Investment allowance at the rate of 15% to manufacturing companies that invest more than Rs1 billion in plant and machinery acquired and installed between April 1, 2013 and March 31, 2015, provided the aggregate amount of investment in new plant and machinery during the said period exceeds Rs1 billion.
- In order to provide a further fillip to companies engaged in manufacturing, an additional deduction of 15% of cost of new plant and machinery is extended for investments exceeding Rs250 Million (acquired and installed during any previous year, until March 31, 2017)
The manufacturing industry, currently constitutes 15% to the country’s GDP, which is very less compared to China’s 32%. The present initiative aims to increase the share by 10%. For this, “we are constructing dedicated freight and industrial corridors and smart cities. We have identified 25 sectors in which India can be a world leader and have created a dedicated team to hand hold investors from across the world”, said Nirmala Sitharaman.
How Make in India will benefit Cleaning Industry ?
Among the 25 sectors included in the Make in India mission, Cleaning as an industrial segment has neither been identified nor has any mention. The identified sectors are automobile, auto components, aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery, electronic systems, food processing, IT &BPM, leather, Media & entertainment, mining, oil & gas, pharmaceuticals, ports, railways, energy, roads & highways, space, textile, tourism & hospitality and wellness. However, when contacted by Clean India Journal, Dushyant Thakor, GM-Invest India said, “Regardless the industry type, Make in India is all about easing the access. As far as manufacturing cleaning equipment and tools & accessories is concerned, it will come under the manufacturing industry and hence, will be benefitted by the Make in India initiative.”
“To have a start-up or to start a cleaning company in India, you do not need to get any industrial license. One needs to register unde
r IEM and the person will receive the acknowledgement within a week,” informed Arun Mahendru, Sr. Development Officer (Engg.), IP&IC-IV (including FIPB cases for Africa,) DIPP. Industrial License has now been limited to defence and explosives only and environmental clearance is also being limited to very few industries.
Cleaning Market to grow manifold
Tom Enders, CEO-Airbus has announced to team up with Mahindra Defence Systems Ltd. This will be the first private Indian helicopter manufacturer under the ‘Make in India’ initiative. The stake will be as per the current FDI guidelines.
Airbus Defence and Space has also submitted a joint proposal with Tata to produce the modern C295 aircraft in India as a replacement for the ageing Avro aircraft of the Indian Air Force. The Division also plans to develop and manufacture electronic sensors with a partner in India, and has advanced discussions to support Hindustan Aeronautics’ combat aircraft programmes.
General Electric will invest around `3000 crore in Maharashtra as part of the Make in India programme.
Taiwan-based niche smartphone and tab maker HTC finally does a Samsung and will manufacture mobile handsets in the country. The company in agreement with Global Devices Network will set up a manufacturing and assembling unit in Noida.
Taking Make in India campaign in cognizance, Spice Group, a leading home-grown mobile conglomerate announced an investment of `500 crores to set up a manufacturing unit in Uttar Pradesh or operations include Samsung, Hitachi (setting up an autocomponent plant in Chennai), and Huawei.
France-based LH Aviation has also signed an MoU with OIS Advanced Technologies to set up a manufacturing plant in India to manufacture drones.
In line with the Centre’s move, the Maharashtra Government has initiated Make in Maharashtra campaign. While investing more than `100 crores, investors will have the facility of one window clearance under the ‘MAITRI’ (Maharashtra Industry, Trade & Investment Facilitation Cell) scheme to give all the approvals required for new industries within 30 days.
Volkswagen, one of the largest Automakers has further setup a plant for manufacturing small segment cars in Chakan.
Leading global chocolate maker Mars Incorporated is investing `1,005 crore in a greenfield project to make chocolates at Khed city, near Pune.
Under Railways, investments have been done for Rail Wheel Plant at Bela, manufacturing traction alternators for High horse Power at Vidisha forged wheel factory at Raebarelli and Rail Spring Karkhana.
So far, there is no clear picture, how much investment is being made to calculate the exact market potential coming out for the cleaning industry. Given the fact that Pharmaceutical industry spends 1.4-2% on cleaning & hygiene, and rest of the sectors 0.4-1.2%, Make In India project will create a minimum of $1 billion market for the cleaning industry.
Out of 12 million youths coming out to the job market annually, India has been able to create only 1.2-2 million jobs. Huge market let down by policy paralysis. “Make in India will create nine crore jobs over the next five years. Better employability quotient will deliver best-in-quality products,” said Chanda Kochhar.
Clean India Mission
“Around 1600 people die every day because of poor sanitation, cleanliness & hygiene facilities. Clean India Mission is here to address them, building the country’s image in background.”
Right after the launch of Make in India (September 25), Clean India Campaign was launched on October 2, 2014. The five-year mission will cost over $10 billion to be contributed from both the central and state governments (75:25 respectively and 90:10 for North-Eastern and special category states) along with corporates as well as individual philanthropists. The World Bank has also committed to give an aid of Rs240 crores in the next five years to the Centre for constructing toilets in households in the tribal areas and also for running proposed awareness campaigns. “Over the next five years, the government and the private sector will create a market of $23 billion through this scheme; thus, setting in motion a construction boom that will reverberate across scores of industries that will supply bricks, cement, steel, sanitary ware, plumbing and other raw materials. Assuming a very low multiplier effect of $3 per $1 invested, this scheme to build toilets would add around $70 billion to India’s GDP over the next five years. However, it is not just about the economics – having toilets in households, especially in rural India would also have a knock on effect on the safety and security of women, which in itself is a worthwhile cause to pursue as is the intended effect of lower health expenditures through improved public health across India,” observed India Inc.
The mission’s objectives are:
- Eliminate open defecation
- Conversion of unsanitary toilets to pour flush toilets
- Eradication of manual scavenging
- 100% collection and processing/disposal/reuse/recycling of municipal solid waste
- To improve cleanliness & hygiene awareness
- Supporting urban local bodies in designing, executing and operating waste disposal systems
Swachh Bharat Mission (SBM) has further been divided into SBM-Urban and SBM-Rural.
Under SBM in urban areas, 1.04 crore household toilets are to be constructed by the year 2019. The Ministry of Urban Development extends an assistance of Rs4,000/- per toilet.
However, the major problem is not only eliminating open defecation, but the non-segregation, overburdened and inadequate garbage recycle plants work inefficiently and municipal bodies go for landfills as quick fixes. The growing landfills have burdened the city infrastructures.
SBM Technologies
So far, around 25 technologies have been identified – 15 for drinking water treatment and 10 for sanitation. Joint Secretary & Mission Director Praveen Prakash pointed out the importance of technology in the success of SBM, “You will agree with me that technology will be a key consideration for the mission’s ultimate success. During interaction with municipal functionaries in many States, we had noticed a lack of awareness about the latest trends in sanitation technologies, best practices and procurement procedures. There have been demands for hiring of competent professionals at State and municipal levels for which the suggested procedure has already been shared.”
Water Treatment
- Capacitive de-ionization technology using carbon aerogel material
- Jal-Tara water filter
- Aqua+ and Antenna WATA technology
- P&G Sachets for purification of water for drinking purpose
- Supremus Aqua standalone water purification system
- Prefabricated, precast modular toilet with biodigestor
- Integrated water disinfection system with solar pumping water disinfection by UV/ electrochlorination
- Iron removal using Iron resin
- Ion exchange
- Bioecotech and Iontex
- Solar powered salt purification
- Portable solar powered water purifier
- LifeStraw
- Plimmer Cdi
Sanitation
-
Soil Bio-Technology for sewage treatment /effluent treatment
- Phytorid technology for wastewater treatment
- Biodigestor for human waste disposal
- CAMUS SBT technology
- Ecotechnology – Soil Scape filtration
- Electrochemical arsenic remediation
- OS smart process for sewage treatment
- Bacteria led bio-remediation / Bio-Augmentation, Reed Beds, Anerobic Digestors for lake cleaning and other purposes
- Plastic Honeycomb
- DRDO Biodigestor
- Annual Targets under Swachh Bharat Mission
There are criticisms over the viability of this project that demands participation from each and every Indian. It is notable that Swachh Bharat Abhiyan is not a new programme to better the country’s sanitary facilities. Launched in 1986 as the Central Rural Sanitation Programme, the scheme later became the Total Sanitation Campaign (1999) and Nirmal Bharat Abhiyan in 2012. Merely renaming or re-launching may not help achieve the Clean India mission. Having made new targets of making 25 lakhs toilets a year, it failed to recognise reasons behind non-working of the existing IHHT and community toilets that can be up to 40%. The mission fails to build a sustainable model, recognising cleaning as an industry.
While the new recognition for Sanitation is welcome, it cannot be achieved in four to five years. Therefore, the Government should look at this more holistically and I think it is doing that, at least from what people in the sanitation industry hear from the ministries.”
Bruno Longo, Comlurb, Latin America, said that “Usually governments are slow to identify and solve such problems. This creates more problems. Further, if private players are pushed to the functional co-operation without being asked to participate actively at the planning stage, this is not the way a systematic plan works, so I can’t really consider any help here outside of governmental action.”
Besides what The New York Times observed, ‘Modi vows cleaner India, but no clear path to get there’, success story cannot be written alone, based on the gap between what we have achieved and what we had intended to. The starting point also, must be taken into account! In a short span of eight months, both Clean India and Make in India have got its fair success in bits and pieces. In Madhya Pradesh alone, “3,40,234 applications for the construction of Individual household toilets have been received so far, of which 2,71,000 sanctions were issued,” clarified Praveen.
We will have to wait to see what will be achieved by 2019, however it is important to keep the momentum on the right tracks.
The August issue of Clean India Journal will bring more insights to the story from industry perspective.