The World Economy is mending from an extended stagnation. The world is fast changing due to adjustment of manufacturing weights across the globe. China and japan have been facing challenges of increasing costs. The US and Mexico are trying to restore their share of global manufacturing. In the meanwhile, India witnessed the most assertive election verdict in 3 decades and is hungry for growth. The confidence seems to bring an economic revival through manufacturing as the key agenda. Keeping this in mind Prime Minister Mr. Narendra Modi has launched the Make in India Campaign to envision India as a global manufacturing leader.
In today’s world market there are two ways of surviving in the industry. Firstly, a Research oriented Industry with outsourced model to obtain a good market share by generating quality products and distribution strategies. Otherwise, a manufacturing based Industry is the other mode of survival.
The Indian Manufacturing primarily has to surpass the battle of rising costs. Currently, dimension of India’s cost competitiveness is good only next to Indonesia in lower manufacturing costs. When we go beyond the cost parameters India’s dimensions do not look bright. India ranks 142(as per BCG survey) in the ease of doing business and has seen a downward trend in fields of business, logistics performance and corruption perceptions.
The Make in India is targeting a 25 percent of National GDP through Manufacturing and creating a 100 million jobs. India has a good number of young Intellectuals who can deliver extraordinary results if we can provide them guidance, resources and right opportunities. They have been proving their skills in USA and other western countries. We have to indeed create aspiration and ecosystem for the youth in contributing towards Make in India.
There are few things which every manufacturing leader should keep in mind to make this a manufacturing friendly country. Right infrastructure shall build great supply chain and smooth channel between manufacturing units and customers. The major input cost for industries is Power, water, manpower etc which are in an abysmal state. Government policies have become unfavorable. We show high concerns for pollution and environment but industries are wasting gas and fail to properly utilize it for generation of power and steam due to higher costs. Industries find alternatives which create pollution to the environment and resources provided like ETP etc are also not maintained properly.
On the road to global leadership and making this campaign successful we have to revive our manufacturing policies by taking few issues into immediate consideration. Firstly, labor reforms for cost competitiveness and production growth. Second, clearance procedures have to be revived while the taxes imposed have to be reconsidered and access to credit terms have to be provided. Industries try surpassing several taxes and procedures by finding shorter paths and leading to bad quality of products in the market. Third, focus on creating R&D and technology led innovations for gaining global competitiveness which has to be supported financially and technologically by the government.
Harish Chatterjee , Vice President- MFG