In the recent budget, the lawyer finance minister Mr. Arun Jaitley increased custom duties. In this opinion that will ‘force’ companies to make in India than import. Importing he feels will become costlier. It would help Indian manufacturing.
I find such an analyses flawed. In such manner if any nation imposes duties on imports they should become a first world country by making all inside their land. Maybe this duty was lobbied by many manufacturers that felt levying duty was harming more their interests because it gave others a level playing field. Higher duty only helps crony capitalists, not the country. Here’s my opinion on such failed actions, and idea of make in India really.
Make in India is about Entrepreneurship and Enterprise
How does socialist government help capitalism? Changing duties and running the show isnt how Make in India will come about. MII is the last step before so much has to occur. India requires the right mindset first, and then the right soil.
If the government wants to Make in India, say Aerospace and Telecommunications; will duties help it to create Boeing and Nokia equivalent? All that will happen is to keep in pace with the world, its people will pay a premium to access these goods that cannot be made in India. Think of it whilst government will levy duty for its people’s access, it will buy aeroplanes for Air India at possibly zero duty; then run it into thousand crore losses. So much for duty imposition. All duties do, is penalize people who have risen to a standard they can afford the price of technologies not available in India.
What will make the desire of MII run up? My answer is the biggest problem between Make in India’s success is a big intrusive government. All it has to do is get out of the way of people. Stop meddling and regulating excessively. It is that simple.
The issues that come between make in India and realization, as I see it:
- Quality of justice, speed, arbitration and protection of Intellectual Property.
No one will produce in India any innovation where such can be copied easily and it takes decades or years to tackle it. This is government’s job, not running businesses. Do you think the government is doing its own job successfully to take on business regulations? I think not at all.
- Ease of Business Startup, Operations and Closing.
Indian laws of starting and running business (enterprise) can be called crazy. They make little sense and there is little courtesy for entrepreneur. For example, we have noticed nationwide if there is a crime that happens in a part of society that has high illiteracy, rural, and backward; the government starts shutting down nightlife venues that welcome tourism.How about excessive interference by income tax; harassment by customs or excise, and running pillar to post for licenses for opening service. Thereafter exploitation by government servants. Frankly most of these government servants have not joined by merit, instead through reservations or bribe.Once the entrepreneurs are operating, there are laws that arent simplified. Everything is complicated from filing taxes to making international payments. An entrepreneur has to go through departments, verifications, documents, proofs to collect their own payment or send their own money for a transaction.There are different departments, different laws, excessively large government dying to employ people in its belly. MCD, Income Tax, Excise. They all need to do something, and that ends up in just harassment of the entrepreneur.
- Better trading and import/export infrastructure.
This I understand is another issue that holds Make in India or just India Business back. There are few cities with good infra. Infrastructure means accessible ports, markets, roads, business spaces, and communication facilities. That is again the area of government to help build through goals; or build on its own. To create volumes of business, India requires more transaction points and first class communication and trading highways. I believe this will better be done with Government and People participation. Government should NOT do things on its own. It doesnt have the requisite interest, focus, and capability or passion like an entrepreneur would have.Government’s job is to make it easy for people. Currently, its action is make it more difficult than before through excessive intrusion.
- High Quality Education is Required.
All the things Im speaking of here as IP, Arbitrations, Infrastructure, Education, Security; the governments are failing desperately. Whilst wasting their time and focus into creating more and more regulations to control what people do (laughs). They are precisely running in the opposite direction of Make in India. Their actions say “Run from India”.A serious disadvantage in India is its people’s quality of intelligence in result oriented tasks. The people coming into jobs may be young and able bodied, but do they all want to be labour? One requires employees to be well educated, and honed in skills of thinking scientifically. Each person should be employed in areas they specialize personally or have a passion. In India people are all occupied in jobs they have no specialization or interest in.Millions join accounting, and they have little or no understanding of needs of business accounting. It takes years to make them normal, not great. And then they can just leave you one day (as they do).Value education thus is critical. We neither have utilitarian nor value education. The bad quality is churning out really bad working people with no integrity. To my evaluation, people in India carry only integrity based on family values. Education from institutions is not worth a note.
- Mindset of Wealth is Good is Mandatory. Invite to accumulate wealth.
There is a constant bombardment culturally that shows wealth accumulation in negative light. In American years of Reagan, and as the American dream this idea was the foundation of everyone in America try to do their best. American dream meant their work would be rewarded beyond their dreams. Is it not a fact that today American companies (started by individuals) own most of the planet’s wealth and markets?A poor nations mentality is always that the government must equalize wealth by taking from the rich through excessive taxation, through regulation, and offer to the poor. Rarely such happens because this “theft” creates huge corruption in re-distribution.An entrepreneur that starts a business factually is the first loser definitely and the ultimate winner maybe. Thus the only reason someone will be willing to gamble their life’s time and youth is if there is a very large jackpot awaiting in the end. That jackpot in the entrepreneurs mind is in exchange for lost youth, lost family time, lost peace of mind, lost freedom, excessive responsibility, managing governments taxes and being a stalwart of growth and fuel of economy.
A government must realize how to assure more people will want to become entrepreneurs. Unfortunately politicians do not know entrepreneurship, especially in Non-American nations. Life has been easy, the reason of success is excess of public. Wealth is either not criteria (power and benefits instead) or made through short cuts. They do not understand creating a system where the nation i.e. its people progress.
The government must create a facility to assure people their property will be safe; that government will guard and let people accumulate more wealth through entrepreneurship.
The road to wealth, progress in an evolved manner; through a firm foundation is to be built through sensibility, generosity, maturity, and evolution. Government is the greatest instrument that can let a nation become first world. It’s trust in citizen, and freedom it bestows will let creative processes start. Make in India is not a 5 year plan. It is a goal to create internal strength and change a nation; to change a mindset.
Therefore when I see politicians doing cosmetic surgery to make India beautiful, some times by duty, sometimes by sops, I see another failed initiative.
But here is the hindsight of failing to progress the nation; such a nation ultimately breaks or remains destitute. Its best and brightest move ashore; its wealth is either purchased or colonized by foreign powers at low cost. Such nation ultimately falls once its weak enough, like Egypt, Iraq, or Libya. What is the difference between them and India? India has not lost its best and brightest till now. Once that is done..