Will India Make it?
Published on : Monday 01-06-2020
India can be the next global hub? Yes, but not without addressing some basis issues and making a course correction, says Anil Sharma.
Over dependence on the Chinese supply chain has left the world devoid of options today. The present global crisis has made everyone think if there is an option. The past attempts of the leading global players of the world to develop countries like Vietnam, Thailand, Indonesia, Poland, the Czech Republic, Romania and Slovakia as alternate sources have not been successful partially because of poor supply chain and infrastructure development and inefficiencies, as well as the lack of commitment of local regimes to think global and change like the way China had done. Volatility of political systems and inflation in these countries has also added to the woes. India has just been standing around staring at the opportunity, but also falling prey to Chinese comfort (being very close) and in the past two decades, thousands of Indian manufacturers have become traders. We kept loitering between an agrarian economy and a service economy for over two decades and never realised our true manufacturing potential as we remained a self-serving economy and could never see the world as our market, including the government as well as the business fraternity. The Covid-19 crisis perhaps presents us with another opportunity, but there are a few critical aspects which have to be addressed first:
Treat our own people humanely
The poor worker works 10-12 hours, commutes for 1 hour minimum to earn just enough for two meals and lives in neighbouring villages (across the country) in sub-standard conditions, facing sanitation and hygiene issues, shortage of power, water scarcity and lack of empathy from rude landlords plus racism in their own land. China sorted it more than 2 decades back by having: 1) Dormitories at/near the premises; 2) Serving 3 meals cooked for them; 3) Providing habitable place where they live and do the rest of things like laundry, etc., with company provided equipment. The immediate advantage is saving in time and energy and average working hours often stretching to 12 hours. To do all of this in India will not cost more than Rs 3000-5000 per person and if that’s the cost of growth, consumer will pay for it. Increase in productivity and due increase in efficiency and comfort will more than compensate for this.
Government support
In 2008 China brought some reforms, by which workers including executives are covered for protection with social security, which in India is about 20% (not available to all). The same in China is in excess of 30% including pension fund, health insurance, etc., which are delivered in times of need as healthcare access to the work force is same as anyone else. The majority of these services are run by the Government. All industrial zones are provided space for dormitories and subsidised land to begin with, which now has increased and no body minds it. In India the cost of land makes manufacturing unviable even before the enterprise starts due to high fixed cost, and if the entrepreneur has to bear all the burden, it will be impossible. SMEs and MSMEs need special provisions for the same, because they will become the backbone of the change by improved focus on scalability and quality and efficiency.
Industry in every village
This has to be a motto. If one has to differentiate between a worker belonging to Haryana working in Haryana and one coming form UP or Bihar to serve in Haryana, the former has the advantage of going home, helping in spare time with household chores of agriculture, etc., there is wealth accumulation and high emotional satisfaction and they develop properly generation by generation. That’s not happening to migrant workers, many of whom in third generation also have not changed their financial status. Industry has to be widespread and the federal structure has to complement the same. Food, clothing and other, essentials are required by every State and can be produced in every State, which is not the case presently.
Entrepreneur has to think big
The world is the market and we have to think like that to start thinking the cost as incidental and then only large supply chains which can serve the world better can be created otherwise make in India, Skill India and Digital India will not bring the desired results, just remain slogans. Post this crisis, the world should see India pro-active, aggressive, capable and moving in one direction as future partner to create the abundance we truly deserve with such, large intelligent manpower.
Anil Sharma is currently Group Head of Supply Chain and Product Management (placed as Operating Principal in SAR Group). Anil has in the past performed various roles in diverse segments such as operational transformation, innovations in supply chain and purchasing, business process re-engineering, development of organisations and people, managing organisations in transitions pre- and post-acquisitions and mergers and global supplier development. He has been exposed to many business verticals including consumer durables, electricals, engineering, automobile, electronics and energy, and has lived and worked in India, Europe, China and APEC region.
