There was an unintended irony in the launch of the ‘Make in India’ campaign — the plan to transform Asia’s third biggest economy into a global manufacturing hub, unveiled by India’s Prime Minister Narendra Modi with much fanfare in New Delhi. This gaffe was hard to miss for those present at the event. The USB flash drives containing the electronic versions of the brochures were made in China.
Modi considers the campaign as a lion step, as the logo of this campaign is the silhouette of a lion on the prowl, made entirely of cogs, symbolising manufacturing, strength and national pride. In Indian folklore, the lion denotes the attainment of enlightenment, besides representing power, courage, pride and confidence. However, this proverbial lion has been caged for years due to excessive rules and regulations, archaic laws, egregious levels of corruption and an embarrassingly hostile and irrational tax system, coupled with a stringent policy that makes entry of foreign entrepreneurs far more difficult.
Policies, as policymakers often describe, should be black and white. However, Indian policymakers have seldom put this into practice, with Indian laws having various shades of grey, creating confusion even amongst Indian investors. Let alone the foreign investor who anyway will have to make an extra effort to acclimatise with the local culture.
For an economy that is already under strain due to shrinking growth, this campaign is critical. If the balance of payments, fiscal deficit and other critical parameters that gauge the health of any economy have to present a rosier picture then India must stop importing. For a country that already lacks the key natural resource of oil and has no option but to import it, importing other items is suicidal and yet India continues to do so. The China-made USB is simply a pointer to the limitations of India’s electronic manufacturing sector. India imports 65 per cent of the current demand for electronic products, most of it from China. If the situation is left unchanged, the country’s electronics import bill may well surpass its oil import expenses by 2020.
Year after year, India fares miserably in the ‘ease-of-doing-business’ surveys, but very little has been done to ensure it moves up this ladder. India has just way too many laws, adhoc implementation and too little governance. Any entrepreneur has to comply with numerous labour laws, tax, pollution and other regulatory enactments. While abolishing archaic laws is a welcome move, it would be far more productive to spend time eliminating unnecessary rules, forms and returns than reveal moribund 100-year-old laws that were implemented by the colonial rulers.
Biggest fault line
Economists believe that for every $50 billion (Dh183.9 billion) that is invested in India, the economy grows by one per cent. Presently, India, according to the Department of Industrial Policy and Promotion, attracted $1.27 billion in the month of August. India can attract four times this amount if it simply allows industry and the service sector to operate in peace rather than constantly harassing them with rules and taxes. While setting up and winding up companies is a matter of a few hours in countries like Britain and Japan, in India, the simple process of name approval often takes months. Also getting approval for other utilities takes ages and is often done intentionally by bureaucrats and politicians just to ensure that the applicants are harassed and forced to take illegal routes to obtain the same.
Labour agitation has been a serious problem for the growth of industries in India. People have done their bit by diminishing the political strength of the Left parties, known to fan militancy among labourers, creating unrest and at times lawlessness in industries. However, the biggest fault line lies in the lack of technical and vocational training which, unless encouraged aggressively, will not provide enough hands to make the ‘Make in India’ campaign a real success.
The government has to determine the roles and responsibilities of stakeholders: Central ministries of education, human resources and social security, the sub-national departments of education and training institutes and enterprises. It must provide for integrating education and training with the industrial process through participation of local enterprises.
The Indian prime minister has to ensure that the country’s 10,000 secondary and senior secondary schools have a vocational education stream. Currently, vocational education is offered mainly in Classes 11 and 12. In India, millions of children drop out of school even before completing the compulsory eight years of education. If the government is serious, it has to provide stipends for these children so that they are encouraged to join these courses rather than work as waiters in tea stalls all over the country.
The government must reinvent the wheel of education, whereby millions of Indians can learn the skills to ensure that wheels of production spin rapidly — truly transforming India into a global manufacturing hub.
