Coining an impressive slogan by itself means little. The Vocal for Local, for one, raised on Independence Day this past week by Prime Minister Narendra Modi does not translate to much unless it is demonstrated on ground zero. The fact, on the ground, is that there is hardly any noticeable momentum on this front in the past six years of the Modi government.
The drift, started during the UPA period with a massive invasion of the Indian markets by the Chinese, continues unabated other than for some selective bans. Even these bans were imposed when pushed to the wall – in the aftermath of the Chinese aggression in Ladakh. Then came an exhortation from Defence Minister Rajnath Singh about plans for local production of some items meant for the defence services.
It is worth a serious analysis as to why even consumer goods have to be produced in China and marketed in India. The marketing advantage for China is not just in the price factor but also in matters of finish and quality. Many Indian products are simply anachronisms. Even by shipping products to far-away locations in India, Chinese manage to sell them at rates cheaper than the price of the products in India. The question arises as to why local manufacturers are not able to compete with China. Labour charges are not high here. The manpower is abundant. Fact is, there is no effort on the part of the government to identify the reasons for this Chinese invasion.
Two aspects are prominently discussed. One is the cumbersome taxation structures in India. Two, the level of corruption pervading public life wherein those who start a business unit will have to pay through their noses to politicians and bureaucrats before they get the necessary sanctions. Crores are pocketed at many levels. This remains as a serious dampener and adds to the cost and price factors.
When India embraced Liberalization in the early 1990s under PV Narasimha Rao, the understanding was that the Licence Raj will be a thing of the past. Twenty years later, in one instance to cite, the nation heard tales about a Union minister under UPA II insisting on a 10 or 15 per cent bribe for every government approval, on the total cost of every project proposal reaching the Urban Affairs ministry.
PM Modi’s Make-In-India project is limping. FDI flow to India remains moderate. Now, there are big talks about wooing multinationals from the West anchored in China to India. It will be worth a watch how many would be willing to come and set up shop in a land known for its chaos and ‘noisy’ democracy.