This post was edited by StellaSong at 2016-2-15 09:40|
A huge fire broke out Sunday evening at acultural extravaganza for "Make in India Week" business forum in theIndian financial hub Mumbai, burning down a whole stage. [Photo/Xinhua news]
Make in India. Even the term soundsslightly defective. For better or worse, that is the slogan with which NarendraModi, India’s made-in-Gujarat prime minister, has branded his effort totransform the country into a manufacturing powerhouse. The goal is overdue.
It may also be unrealistic. The countrydoes not have a good reputation for making things. Even Indians shun their ownproducts. Jugaad, the so-called Indian way of innovation, was born of scarcity.Mihir Sharma, a commentator, says his countrymen make things “held togetherwith cello-tape and paan stains and prayer” — although high-tech goods, forexample in aerospace, are actually of high quality.
Ifthe Indians make some things shoddily, they also do not make enough.Manufacturing accounts for only 15 per cent of national output, against 32 percent in China and 34 per cent in Thailand.
The obstacles are formidable. First is thequestion of physical infrastructure. India lacks the ports, roads and railwaysto transport goods, and the dependable energy supplies to keep factorieshumming. Taking into account overall costs, the country is only 5 per centcheaper for manufacturing than Mexico, according to Boston Consulting Group.Outside certain industries, such as cars, it also lacks the ecosystem ofsuppliers that make clusters such as the Pearl River Delta so competitive.
Perhaps worse is the state of India’s softinfrastructure. Would-be factory owners cannot get hold of land or get rid ofworkers. Plants operate on suboptimal scale or use ruses to get around labourlaws: only 16 per cent of workers are formally employed. Unreasonable laws area breeding ground for corruption. So is an unreasonable tax environment, whichcan be as changeable — and devastating — as the monsoon season. Investors whowade through all this are not always thanked for their efforts. Delhi is seeking$100m in damages from Nestlé, accusing the Swiss company of poisoning Indiansby allowing high levels of lead in its noodles. That claim seems unlikely.Regulators in the US, Canada and New Zealand have pronounced the same food safeto eat.
Mr Modi has promised to bulldoze suchobstacles. All he needs is a bulldozer. There have been efforts to rein inretroactive taxes. The upper limit for foreign ownership in certain industries,including defence, has been raised. Not much else has happened. Neither landnor labour reform is getting far. Infrastructure is a work in progress. “Modineeds to get into the nitty-gritty,” says Gurcharan Das, an author and formerhead of Procter & Gamble India. If Mr Modi is to make Make in India areality, he will need more than a slogan.
( The passage is an excerpt from financial times, the writer is Davis Piling, a columnist with financial times)