DO IT Through a unified ministry and the participation of domestic companies in major infrastructure projects
Let me start by giving you a little background. Indian manufacturing has been in the ICU for the last two years, and no one seems to be bothered about reviving it. There has been a lot of talk, but no action from the government. The Index of Industrial Production (IIP) numbers are clear indicators of this. Growth has been flat or negative, after the increase we had three years ago. The projections then were that at least 25 percent of India’s GDP should come from the manufacturing sector. The sad reality is that the share has actually come down from 16-17 percent at that point to about 15.5 percent now.
This is partly due to inaction by the govern-ment. Consider this: The manufacturing sector needs all kinds of clearances from the government—land, power and environment are through state intervention. Since the last two years, these approvals either take forever or do not come through at all. Permissions that would need one or two months earlier take six to eight months now. The press is calling it paralysis; the truth is there is simply no one accountable for making things happen.
The assumption seems to be that an entrepreneur will make windfall profits if these are acted on. But ‘sitting’ on the files means jobs don’t get generated. With every delay we are also denying jobs to the youth. The nation is losing opportunities to create a deep manufacturing base. I’ve seen several ups and downs in business cycles, but it’s never been so bad. Things are badly out of shape.
The contrast with other countries could not be starker. We are putting up a new plant in eastern Germany—and we don’t even have to go anywhere for approvals. It’s all done online and we get the answers in 45 days. Here, we have to meet people for six months to a year, and the files just keep moving.
(This story appears in the 30 May, 2014 issue of Forbes India. To visit our Archives, click here.)