January 20, 2014
We are one hundred per cent different from China, at least as far as manfacturing and factories go.
SUMMARY
The government of India, it seems, has decided that factories must not be allowed to come up or to run.
Uday Kotak said a few months back, in the course of an interview, that he was amazed that in his new office in Mumbai, not one of the furniture or fixture items were made in India. My friend Rahul Bhasin conducted a similar exercise in his office in Delhi and discovered pretty much the same thing. The carpet is from China, the furniture is from Malaysia, the light fixtures are from China, the glass partition is from all places, Jebel Ali in the Middle East and so on. Kotak went on to add that even Ganesha statues are no longer made in India. They are imported from China.
Our great, glorious, imperial, imperious government in Delhi, I am told, organises what is called a cabinet meeting every week. The first item on the agenda is to take stock of how well the country has progressed in destroying its manufacturing base; the second item is to think up Machiavellian new ways to further emasculate what is left of Indian manufacturing. I am told that it is during one of these sessions that it was decided that the income tax department should mount a strong and no-holds-barred campaign against Nokia, a defenceless Finnish company which had shown the temerity and gumption to not only bring FDI into the country, but to actually be one of the few (only?) investors to set up a manufacturing facility.
The super-patriotic, super-matriotic cabinet of the super-intelligent republic of India has decided that land must not be made available to factories, electricity should be denied to factories, factory managements should be harassed by various super-inspectorates and flexible labour policies must be denied to factories, thus discouraging the employment of labour in our factories. The reason this is being done is clear. We must be different from China in every single way. In China, land is easily made available to factories; in China, good quality electric power is made available to factories; in China, local government officials do not harass factory managements — au contraire, local officials encourage factory managements; in China, factories are allowed flexibility in labour practices; paradoxically China’s factory managers hire lots of labour. Our hyper-patriotic, hyper-matriotic, hyper-intelligent cabinet has succeeded brilliantly in achieving what it set out to do. We are one hundred per cent different from China, at least as far as manufacturing and factories go. I teach young engineers at IIT Bombay. These days, quite a few of them are interested in becoming entrepreneurs rather than in taking up salaried corporate jobs. Their enthusiasm is boundless and quite impressive. The interesting thing is when I ask them as to what kind of enterprises they plan to start, they all talk about dotcom companies, data analytics companies, mobile software applications companies and so on. Not a word, not a whisper about factories or manufacturing. And these, mind you, are some of the brightest engineers in the land. When questioned, they tell me that the very thought of starting a factory is so daunting that they give up. These young persons all seem to be aware that it is the objective of the great government of India not to have factories in the country. Being patriotic youngsters, they are merely following the directions of our benevolent government.
I have always felt an inner glow and a tightening of the stomach whenever I have visited a factory, be it the weaving section of a textile mill, the metal-bending shop of a shock absorber plant or the assembly room in a capacitor production facility. It is just a thrilling experience. When I did some research, I discovered that our cabinet ministers have received official instructions to avoid visiting factories as far as possible and under no circumstances should they allow positive vibes to hit them. They are obliged to look down on factories. Numerous NGOs have submitted well-thought-out and brilliantly researched position papers that all factories are polluting, industries, both big and small, are dangerous for our national well-being and so on. Cabinet ministers, I am told, are required to read and memorise these papers. Every Tuesday morning, a quiz is conducted, where the honourable minsters are tested with respect to their knowledge on the subject of anti-industrialism. So here we have honourable persons who are discouraged from visiting factories, who feel no joy when they visit one and who are coached into accepting the self-evident truth that all factories are polluting beasts that should be shunned.
Rahul Bhasin is a private equity investor who is trying to invest in Indian factories despite the government of India emphatically telling him that this is not a smart thing to do. He had two stories to tell me. The first is as follows: Bhasin received a business investment proposal from a dynamic entrepreneur in Tiruppur. The proposal involved dismantling the existing factory in Tiruppur and moving it to Oman. The entrepreneur claimed that despite Oman’s high labour costs, the sheer ease of doing business there would make this proposed shift economically viable and profitable. Needless to say, Bhasin, being an Indian patriot of the subdued variety and not a hyper-minister, was not sure whether he should weep or laugh. The second story is about a run-of-the-mill factory. The factory manager answered all questions competently. When it came to questions relating to the use of the back-up diesel generator, the manager started to fumble. Finally, he said rather sheepishly: “To tell you the truth, Mr Bhasin, we have never had a need to use the back-up generator in years. Our power supply has been quite reliable.” No prizes for guessing — this factory is in Gujarat. If I were advising the BJP’s think-tank, I would suggest to them that this story is a much better election plank than temple-building, at least with those citizens who like textile mills, forging shops and assembly plants. They might of course lose the votes of the NGOs who hate what they refer to as the “industrial civilisation”.
The writer is a Mumbai-based entrepreneur
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