{"id":256962,"date":"2023-08-22T20:31:32","date_gmt":"2023-08-22T15:01:32","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=256962"},"modified":"2023-08-29T12:13:16","modified_gmt":"2023-08-29T06:43:16","slug":"on-smartphone-manufacturing-in-india","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/on-smartphone-manufacturing-in-india\/","title":{"rendered":"\u201cOn smartphone manufacturing in India\u201d"},"content":{"rendered":"\n

Source:<\/strong> The post is based on the article \u201cOn smartphone manufacturing in India\u201d<\/strong> published in \u201cThe Hindu\u201d<\/strong> on 22nd August 2023.<\/p>\n

Syllabus:<\/strong> GS3- Effects of liberalisation on the economy, changes in industrial policy and their effects on industrial growth.<\/p>\n

News:<\/strong> The article discusses a debate between former RBI governor Raghuram Rajan and Minister Rajeev Chandrasekhar on the effectiveness of the Indian government’s production- linked incentive (PLI) scheme<\/strong> in promoting genuine manufacturing versus just assembly in the electronics sector, especially in mobile phone production.<\/p>\n

What is government’s production- linked incentive (PLI) scheme?<\/strong><\/h2>\n

Read hear<\/strong>: About the PLI Scheme<\/a><\/p>\n

What are Raghuram Rajan’s arguments?<\/strong><\/h2>\n

Program’s Efficacy:<\/strong> The Central government scheme isn’t turning India into a self-reliant manufacturing giant.<\/p>\n

Dependency on Imports:<\/strong> While there’s a decrease in imports of assembled mobile phones, the imports of mobile components (like screens, batteries, and circuit boards) surged between FY21 and FY23.<\/p>\n

Assembly vs. Manufacturing:<\/strong> Companies are largely just assembling phones in India using imported components rather than manufacturing them fully here. The end result is merely a ‘Made in India’ label.<\/p>\n

Job Quality:<\/strong> The kind of jobs created through this scheme are low-level assembly jobs which don’t pay well.<\/p>\n

Economic Impact:<\/strong> Such assembly work doesn’t produce the strong economic multiplier effect genuine manufacturing would offer.<\/p>\n

Net Exports Concern:<\/strong> Even if only 60% of component imports are for mobile production, the import value would still surpass the export value.<\/p>\n

What is the Minister’s response?<\/strong><\/h2>\n

Use of Imports:<\/strong> Not all imported components (screens, batteries) are for mobile phones. They could be for other products like monitors and electric vehicles.<\/p>\n

PLI Coverage:<\/strong> Only 22% of mobile phone production in India benefits from the PLI scheme.<\/p>\n

Value Addition:<\/strong> While the current value added in India for mobile manufacturing is low, it’s expected to rise as the broader supply chain establishes in India.<\/p>\n

Future Outlook:<\/strong> The PLI scheme’s long-term benefits, such as job creation and establishing India in manufacturing, will take time to become evident.<\/p>\n

Conclusion <\/strong><\/p>\n

The debate centers on the PLI scheme’s true impact on Indian manufacturing. While Raghuram Rajan argues that it fosters low-value assembly over genuine manufacturing, Minister Chandrasekhar believes its long-term benefits will soon be evident. The real cost is the potential missed opportunities in other sectors like education when investing heavily in the PLI scheme.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article \u201cOn smartphone manufacturing in India\u201d published in \u201cThe Hindu\u201d on 22nd August 2023. Syllabus: GS3- Effects of liberalisation on the economy, changes in industrial policy and their effects on industrial growth. News: The article discusses a debate between former RBI governor Raghuram Rajan and Minister Rajeev Chandrasekhar… Continue reading \u201cOn smartphone manufacturing in India\u201d<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,8184],"class_list":["post-256962","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","entry"],"jetpack_featured_media_url":"","views":{"total":13,"cached_at":"","cached_date":1698334427},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/256962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=256962"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/256962\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=256962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=256962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=256962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}