Govt needs revisit its policies

June 26, 2014 7:10 am

Govt. should open some sectors like railway and natural resources to private players to raise competition and improve quality
 Mitsubishi established Mitsubishi Electric India (MEI) in 2010 to drive its India business. MEI also supports Mitsubishi Electric’s social infrastructure related businesses, such as power systems and transportation systems. Rajeev Sharma talks about Indian economy and the necessary steps to be implemented in order to become global workshop.
The big ironyIndian economy has become service-based economy with the service sector contributing to around 55 per cent of the GDP followed by manufacturing sector and agriculture sector.
There has always been a talk about the abundance of natural resources and the irony of exporting raw materials and importing finished goods as far as manufacturing sector is considered.
Smart city is also one concept which could promote urbanisation through development of new manufacturing hubs. There are examples of cities in India where one big industry has led to development of large SME cluster which could be taken as a typical case study on how to make manufacturing hubs.
Accelerating factorsKey factors which positively affect the manufacturing sector include transportation, energy infrastructure, govt. policies, public health, education and skill levels, information and communications technology etc.
The country needs to look at its biggest strength i.e. population. Rich dividend could be drawn out of demographics if the manpower is armed with vocational skills. Efficient labour makes all the difference and India is fairly lagging in this area as per manufacturing cost competitiveness report of BCG. As per CII McKinsey study, China’s labour productivity level is 2.8 times than that of India’s and China’s manufacturing sector productivity is 5.5 times than that of India’s.
Other policy and infrastructural development are bound to take time but areas like skill development could be worked upon in a shorter time.  Training the labour will have long lasting and farfetched consequences in making the Indian economy more manufacturing oriented.
Issues to be worked on by govtTo make India a global manufacturing hub the government needs to revisit its policies and work towards an actionable plan to motivate the manufacturing sector. Despite land abundance in India, the acquisition policy is inappropriate and needs an overhaul at the earliest.
The government needs to work more on the concept of SEZ so that industries could be established and a cluster of SMEs could also come and act as an OEM for such industries.
Government should also open some sectors like railway and natural resources to private players to raise competition and improve quality. Even in coal sector, the government must consider introduction of commercial mining with participation of private coal mining companies to encourage improvement.
How Mitsubishi looks aheadMitsubishi Electric India has a roadmap to support the India’s growth story by servicing the economy through its products and services in the various business segments. The company’s focus in India would be organic growth across all its business segments. This would help to fulfil its objective of becoming one of the leaders in manufacturing, marketing and sales of electrical and electronic equipment.
Rajeev Sharma, Strategic Planning and Business Development,                                                         Mitsubishi Electric India Pvt. Ltd.