Thought for the day
”You do ill if you praise, but worse if you censure, what you do
not understand."
-
Leonardo da Vinci (Italian, 1452-1519)
Word for the day
Sporadic (adj)
Occurring singly, or occasionally, or in scattered
instances.
(Source:
Dictionary.com)
Teaser for the day
What is top priority for
"concerned" Indians at this point in time?
(a) iPhone
6
(b) Accessories
for iPhone6
(c) Counting
abs of Shahrukh Khan
(d) Separate
VISA for visiting Edinburgh
(e) Hotel
booking for October 2-6 and November 6-9 long weekends.
Case against "Make in India" - II
Making cement is perhaps one of the simplest manufacturing
processes. This primarily involves calcining the limestone mixing it with clay
or ash and grinding it into fine powder. Having produced it for many decades,
many manufacturers in India still claim superiority for using foreign
technology in this process. A popular advertisement campaign reads 'Italian
technology se bana majboot cement".
Similarly, most automotive companies claim superiority because
they have use German, Japanese, American or Italian technology in manufacturing
their products. Most heavy engineering, power equipment and consumer
electronics manufacturers also use foreign technology in their factories or
assembling plants.
In this backdrop, I see the "Make in India" as a mere
political rhetoric.
Successive Indian governments since Rajiv Gandhi (1984-1989)
have realized that India's strength lies in its vast and diligent labor force.
Given the serious constraints in terms of capital, energy, technology and raw
material the Nehruvian economic model based on heavy industries (largely
converters of natural resources) has therefore been deliberately diverted to a
service based economic model that is less energy & capital intensive.
The midway diversion has though remained inadequate in
conviction and slack in pursuit. Little attention has been paid in developing
and promoting the human resource, which was supposed to be the biggest strength
of Indian economy.
"Make in India" would now mark yet another midway
diversion to the growth strategy. During parliamentary election campaign early
this summer Rahul Gandhi said that his priority would be to get petty low skill
mass manufacturing industrial jobs back from China. I fail to understand why on
earth you want those low paying low skill jobs and highly polluting industries
back. The focus should rather be on skilling the work force and creating high
paying skilled jobs in advanced technology industry and services sector.
Besides, starting a manufacturing revolution in India would
pre-requisite our energy production to at least grow by 50% in next couple of
years. Not even hard core optimists would hope for that.
Allowing foreign manufacturers to establish facilities near the
source of raw material and abundantly cheap labor could evoke immense interest.
But what about experiences of POSCO and Vedanta. Does Modi government plan to
override local concerns, especially relating to sustainability. Are we learning
anything from recent Uttrakhand and Jammu and Kashmir disasters.
Moreover, it is elementary economics that you should not produce
if you could buy cheap. The slowdown in China is deepening. The latest energy
revolution in Americas (shale gas) is leading to a fresh manufacturing
revolution there. The humongous amount of industrial capacities are lying idle
and available for taking. This will lead to large scale spare capacities in Europe,
as it slips into deflation and Euro weakens further. We should be looking at
buying/using these facilities rather than building our own....to continue
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