No clear roadmap

No clear roadmap

The problem is in delivering the dream. How will Modi fulfil desire of millions? He and government have yet to provide a roadmap.

Pradhan Mantri, or rather ‘Pradhan Sevak’ Narendra Modi delivered his first Independence Day speech from the Red Fort with élan. US President Barack Obama had set a new trend of delivering the address to the nation in an extempore style without resorting to a prepared written note. Modi did it even better with not only delivering an hour-long address in free flow but also doing so without hiding behind bullet proof glass and mingling freely with the young students present there. It was a good speech that touched upon a number of issues bothering the nation. 

Modi is known to deliver good speeches; during his election campaign he mesmerised the people, particularly the youth, by his persuasive promises. He sold the dream of an economically resurgent India. On August 15, 2014, India’s 68th Independence Day, too he painted several such scenarios.

One such picture he painted was that of many products being manufactured in India. “Come and Manufacture in India” was his call to all businesspersons in the world. Fair enough to invite them. But, for the foreigners to come and invest in a manufacturing setup will require that the infrastructure and business atmosphere is right. And that the productivity is high enough to be attractive and costs of production are low enough to be internationally competitive. Mere exhortations will not work. 

When one speaks of cost, it is not just the production cost. It also includes the cost, speed and ease of transporting the goods to the ports or to the consumer points. The cost weighs in the ‘uncertainties’ like the political climate, the bureaucratic tangles, the governmental policies regarding taxes, incentives, land acquisition, power availabilities and environmental policies. Moreover, one product’s manufacture depends on the other product. Hence, the entire supply chain has to be efficient. In India, we see a situation where the thermal power generation plants exist but the coal to feed them is in short supply for the past several years. This is just one example.

One may make goods and make them efficiently. But, these goods have to be transported and then exported. Do we have the transport facilities to match the speed of response required in being internationally competitive? Do we have the modern port facilities to help industries send them with speed, without damage and to all parts of the world? Our freight handling is pathetically slow, crude and inefficient. Our roads are, as we all know, in terrible condition. Truck transport is fraught with delays, damages, losses to the goods being shipped. Our ports are clogged due to inefficient old equipment that cannot handle even the current low levels of load. 

The Prime Minister spoke about reducing manufacturing ‘defects’ and reducing the ‘effect’ on the environment. If environment is to be protected, a thorough scrutiny or evaluation of the industrial projects that are proposed will be essential. According to this line of thinking, the environmental clearances being denied to several projects during the previous government cannot be faulted as the BJP did throughout its recent election campaign. How does the current government plan to handle this dilemma of protecting the environment and ecology and giving rapid clearances for industrial, mining and other projects? It is not clear from the Red Fort speech. One will have to wait and see.

Manpower shortage

Modi’s expressed desire to increase ‘skills’ level is laudable. In his speech, he spoke about the shortage of manpower with basic skills like plumbing and smithy. This is true. But, after the initial decades of Independence, India never applied itself to the encouragement and increase of these skills. Industrial Training Institutes set up 50 years ago are now a defunct institution. It takes time to train, acquire and enhance these skills. 

We need more of these basic level vocational institutes than the engineering colleges which seem to even neglect certain essential disciplines such as civil engineering and metallurgical engineering. The direction of technical education has to change. As we see, the issue of ‘Come, Make in India’ is not just one of inviting the foreign investors. It is an issue of transforming the entire approach to productivity, quality, vocational education, science, technology, research and development, management education, worker attitudes, management attitudes, along with rapid and efficient investments by the government in industry related infrastructure such as power generation and transmission, minerals production, roads and railways, airways, shipping, ports, management of water and land resources.

Moreover, mere manufacturing industries in the large corporate structure are not the solution to the main issue of generating jobs for the increasing population of youth in our country. India adds one million youth to the manpower every month. All these have to be absorbed in productive ventures or assignments. We need a fast growth in the number of small and medium enterprises (SME) sector in order to achieve such an employment objective. 

It is unlikely that any foreign direct investment will arrive in this crucial SME sector. Therefore, “Come, make in India” slogan has limited use. Modi is talking of top-down approach; that will take a very long time and by then the problem of unemployment might have become much more intractable. 

“Made in India”, which Modi urged in his speech, is not a new dream. It has been there for several decades with all of us. A famous song by Alisha Chinoy is titled “Made in India”, although in a different context. The problem has been in delivering the dream. To a great extent, Narendra Modi too faces the same problem. How will he deliver the dreams and aspirations of the millions? He and the new government have yet to provide a clear roadmap. Just reiterating the aspirations of the one and a quarter billion people would not help the matters.