A
PROJECT REPORT ON
MAKE IN INDIA
By
AVNISH RANA
DHARMENDER KR MEENA
NAVEEN CHANDRA JOSHI
VIKAS KUMAR
IRSS (P) 2013
Under the Guidance of
Shri Atul Gupta Sir (SPMM) and
Shri Rakesh Rajpurohit sir (PIM)
NATIONAL ACADEMY OF INDIAN RAILWAYS
VADODARA, GUJARAT, 390004
ACKNOWLEDGEMENT
Apart from the efforts of a team, the success of any project depends largely on the encouragement and guidelines of many others. We take this opportunity to express our gratitude to the people who have been instrumental in the successful completion of major project on “Make In India”. We are extremely grateful to our Course Director, Shri Rakesh Rajpurohit for his valuable guidance support and constant supervision as well as for providing necessary information regarding the project.
We would like to express our sincere gratitude to Shri Atul Gupta , Ex Senior professor material management for his valuable guidance.
We would like to acknowledge the efforts and co-operation of all the officers and staff of Diesel Locomotives Works, Varanasi for providing valuable information and necessary data for analysis and fruitful completion of the project.
We extend a sincere gratitude to all the faculty of National Academy of Indian Railways, Vadodara for their constant support and inspiration throughout the endeavor.
Contents
List of Tables
Introduction
What is 'Make in India' program?
Policies under 'Make in India' initiative:
25 major 'Make in India' focus areas
Indian Railways Gets 100% FDI In 17 Key Areas
Changing Perception Towards INDIA
About Diesel Locomotive works
Why DLW is selected for DATA Collection ?
Compilation of Data
Calculations
Problems Observed
Conclusion
List of Tables
Table1 :Details of procurement in IR in 2013-14
Table 2 : List of high value items whose indigenisation is required
Table 3: Items for which no/one part-I indigenous source is available
Table 4: List of Items having sleeping vendors
Table 5: List of items for which developmental tender is suggested
Table 6: List of items for which developmental tender is suggested but not able to find the potential vendors
Introduction
Indian Railways operates both long distance and suburban rail systems on a multi-gauge network (broad, metre and narrow gauges) to carry 8500 million passengers. To maintain the operation in smooth flow, railways owns locomotive and coach production facilities at several places in India and for that Railways have to procure more than 1.3 lakh items. The procurement of these huge numbers of items is done either from indigenous source or by import. The total value of procurement done by railways is approximately 42,447 crores in 2013-14 and the total import comes out to be nearly 5%.
Sr. No
/Details of procurement in 2013-14
/Value(in crores)
1
/Stores for operation, repairs and maintenance
/9,334
2
/Stores for construction
/1,171
3
/Fuel
/14,666
4
/Stores for manufacture of Rolling Stock and purchase of Complete units
/17,276
/Total
/42,447
Table1 :Details of procurement in IR in 2013-14
But in case of DLW, total procurement is about 4500 crores which is more than 10% of total procurement and import percentage of DLW is very much higher as compared to total and that’s we collected our data from DLW to know the reasons of such high percentage of import.
In the today’s world railways is facing a lot of competition from roadways and waterways so in order to have upper hand, we need to provide cheap and better service for freight and passengers and we can further lower down our operating ratio by procuring material from indigenous sources because procurement from indigenous sources is about 25-30% cheaper.
But now the question is why are we not procuring material from indigenous sources???
we found the answer of above question during the data collection and the answer is- there exists a lot of items for which either we do not have or have only one or two indigenous sources. Moreover if for some items there exists some indigenous vendor either they are not participating or they are not able to make the items as per the specified tolerance limits hence it became obligatory for us to buy from foreign sources.
To suggest the solution of the above said problem, what we did in our major project is as following:
We made a list of high value items for which developmental tender is required (mainly to develop indigenous source) and for this we have suggested a list of some potential vendors who can supply the listed items
To promote the indigenisation of high value imported items, we have done a conversation with the sleeping vendors and other potential vendors about their concerns. And what we feel is that there is a possibility of indigenisation of high value imported items but we need to sort out some concerns of vendors so that they can set up their firms and there is a guarantee of profit for them for few years.
What is 'Make in India' program?
The 'Make in India' program is an initiative launched to encourage companies to increase manufacturing in India. This not only includes attracting overseas companies to set up their shop in India, but also encouraging domestic companies to increase production within the country.
'Make in India' aims at increasing the GDP and tax revenues in the country, by producing products that meet high quality standards, and minimising the impact on the environment.
Fostering innovation, protecting intellectual property, and enhancing skill development are the other aims of the program
Policies under 'Make in India' initiative:There are 4 major policies under the 'Make in India' program:
1. New Initiatives:This initiative is to improve the ease of doing business in India, which includes increasing the speed with which protocols are met with, and increasing transparency.
Here's what the government has already rolled out
-- Environment clearances can be sought online.
-- All income tax returns can be filed online.
-- Validity of industrial licence is extended to three years.
-- Paper registers are replaced by electronic registers by businessmen.
-- Approval of the head of the department is necessary to undertake an inspection.
2. Foreign Direct Investment (FDI):
The government has allowed 100% FDI in all the sectors except Space(74%), Defence (49%) and News Media (26%).
FDI restrictions in tea plantation has been removed, while the FDI limit in defence sector has been raised from the earlier 26% to 49% currently.
3. Intellectual Property Facts:
The government has decided to improve and protect the intellectual property rights of innovators and creators by upgrading infrastructure, and using state-of-the-art technology.
The main aim of intellectual property rights (IPR) is to establish a vibrant intellectual property regime in the country, according to the website.
These are the various types of IPR:
-- Patent: A patent is granted to a new product in the industry.
-- Design: It refers to the shape, configuration, pattern, colour of the article.
-- Trade mark: A design, label, heading, sign, word, letter, number, emblem, picture, which is a representation of the goods or service.
-- Geographical Indications: According to the website, it is the indication that identifies the region or the country where the goods are manufactured.
-- Copyright: A right given to creators of literary, dramatic, musical and artistic works.
--Plant variety Protection: Protection granted for plant varieties, the rights of farmers and plant breeders and to encourage the development of new varieties of plants.
--Semiconductor Integrated Circuits Layout-Design: The aim of the Semiconductor Integrated Circuits Layout-Design Act 2000 is to provide protection of Intellectual Property Right (IPR) in the area of Semiconductor.
4. National manufacturing:
Here the vision is,
- to increase manufacturing sector growth to 12-14% per annum over the medium term.
- to increase the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
- to create 100 million additional jobs by 2022 in manufacturing sector.
- to create appropriate skill sets among rural migrants and the urban poor for inclusive growth.
- to increase the domestic value addition and technological depth in manufacturing.
- to enhance the global competitiveness of the Indian manufacturing sector.
- to ensure sustainability of growth, particularly with regard to environment.
25 major 'Make in India' focus areas:
· Automobiles
· Automobile Components
· Aviation
· Biotechnology
· Chemicals
· Construction
· Defence manufacturing
· Electrical Machinery
· Electronic systems
· Food Processing
· IT and BPM
· Leather
· Media and Entertainment
· Mining
· Oil and Gas
· Pharmaceuticals
· Ports and Shipping
· Railways
· Renewable Energy
· Roads and Highways
· Space
· Textiles and Garments
· Thermal Power
· Tourism and Hospitality
· Wellness
Government has allowed 100% FDI in all sectors except Space(74%), Defence (49%) and News Media (26%)
Indian Railways Gets 100% FDI In 17 Key Areas
Indian Railways, which is facing a severe cash crunch to the tune of Rs 30,000 crore every year, received a major financial boost as100% Foreign Direct Investment (FDI) is now allowed for developing infrastructure and improving safety features. The Railway Board and a Cabinet Panel has identified 17 key areas where this FDI can be used.
Ever since its origin, Indian Railways had always been shut off from receiving any kind of FDI, considering security risks involved. But recently cabinet
cleared FDI provisionin the Indian Railways, and the important areas were finally identified and notified.
It is expected that these new guidelines can attract uptoRs 90,000 crore FDI into Indian Railways..
17 key areas of Indian Railways where 100% FDI will be allowed
1. Installation and maintenance of Bio-toilets in passenger coaches
2. Technological solutions for manned and unmanned level crossings (Construction and maintenance of ROB/RUB /Limited Height Subway)
3. Technological solutions to improve safety and reduce accidents (Installation and maintenance of Asset failure detection systems (Track/ OHE/ Rolling Stock/Signaling etc.)
4. High Speed Train Projects: Projects involving those trains which will run above 250 Km/hr speed; and will have no connection or link with any existing railway line or route. The designer will have complete freedom to exercise his creativity and ideas; Government will also chip in with resources and money.)
5. Mechanized laundry (land will be leased by Ministry of Railways at Re 1 / annum)
6. Producing non-conventional energy from sources such as solar, tidal, wind etc with open market tender being offered.
7. Rolling stock procurement
8. Concessioning of standalone passenger corridors (branch lines, hill railways etc). (renovation of these lines, optimizing them for better commercial usage)
9. Testing facilities and world class laboratories for experimenting new technology
10. Setting up Railway Technical Training Institutes
11. Construction of world class passenger terminals and renovation/maintenance of existing stations
12. Creation of Freight terminals/ Logistics Parks in strategically important locations
13. Signaling system – Construction of new facilities to develop advanced systems and renovating/maintaining existing systems
14. Railway Electrification
15. Rolling stock including train sets and locomotives or coach manufacturing and maintenance facilities.
16. Dedicated freight lines on a Joint Venture and/or PPP model, with clear revenue sharing guidelines (Private Trains on certain lines will also be allowed from now on..)
17. Suburban corridor projects through PPP: All new suburban corridor projects are permissible when launched through PPP route by MoR. The developer can construct, maintain and operate the corridor within the concession period.
The Railway Board has outlined a series of ‘terms and conditions’ which apply in this unique 100% FDI route, such as in those projects which are situated near border areas, FDI beyond 49% will be brought before the cabinet panel for due approval; safety clearance and audit are required for projects involving public carriage of passenger and more.
Changing Perception Towards INDIA
India is well known for its services exports, but many doubt its ability to export manufactures and that is the perception which our Prime Minister Narendra Modi plans to change and for this Modi Ji rolled out a red carpet to industrialists, both domestic and international, inviting them to make India a manufacturing hub that will help boost jobs and growth.
We should manufacture goods in such a way that they carry zero defects, so that our exported goods are never returned to us. We should manufacture goods with zero defect that they should not have a negative impact on the environment.
All this will auger well for the economy and the markets as it will help in boosting growth, in job creation and revival of investment cycle in Asia's third largest economy
About Diesel Locomotive works
The Diesel Locomotive Works (DLW) in Varanasi, India, is a production unit owned by Indian Railways, that manufactures diesel-electric locomotives and its spare parts. It is the largest diesel-electric locomotive manufacturer in India.
DLW locomotives have power outputs ranging from 2,600 horsepower to 5,500 horsepower. Currently DLW is producing EMD GT46MAC and EMD GT46PAC locomotives under license from Electro-Motive Diesels (formerly GM-EMD) for Indian Railways. Some of its EMD locomotive products are WDP4,WDP4D, WDG4D,WDG5 and others .
Besides the Indian Railways, it regularly exports diesel-electric locomotives and has supplied locomotives to other countries such as Sri Lanka, Malaysia, Bangladesh, Mali, Senegal, Sudan, Tanzania, Angola, and Vietnam and also to a few users within India, such as ports, large power and steel plants and private railways.
The Target s increased from 319 in 2015-16 to 332 in 2016-17. The cost of one diesel locomotive is 13 to 14 crores.
The total procurement of materials in DLW is of value 4500 crores. The procurement of around 3500 crore value is done through Global Tenders. Total import is of value around 1030 crores. Therefore the percentage of imported items is around 23% of total purchase.
Total number of imported items are 276 which do not have any indigenous source where as some items have only one indigenous registered source and they are about 300 in number. We have tried to select mainly high value items having AAC more than 50 lakhs. Apart from these we have also selected some items which have Indian registered firms but they are not participating in tendering process so they are sleeping vendors.