How they killed our factories

[dray]

How they killed our factories
Jaithirth Rao | January 20, 2014 02:01

We are one hundred per cent different from China, at least as far as manufacturing and factories go. Reuters


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

How they killed our factories | The Indian Express | Page 99

@kbd-raaf posted only the link in some other thread as part of a discussion on another topic, I thought this one deserves to be discussed separately.

 

[FaujHistorian]

In an open trade with China, Indian manufacturing sector cannot compete with the Chinese. No one in the world (for the moment) can compete. No one

 

[dray]

In an open trade with China, Indian manufacturing sector cannot compete with the Chinese. No one in the world (for the moment) can compete. No one

That's primarily because China gives huge subsidies, tax waivers & all other facilities and actively promotes manufacturing. India should also give manufacturers similar incentives to compete with the Chinese, Chinese labour is not cheap anymore. But no, Govt. is doing everything to discourage industry.

And why such a sharp increase in imports, Chinese imports to be specific, in last few years? Why such permission was given and for whose benefit? There are some big retailers like Big Bazar who have become Chinese malls. There are many ways to protect indigenous industry, and any sane country should do that, especially when we have so many low-skilled & semi-skilled labour available in our country and they are desperately looking for jobs. While Indian manufacturers are needed to follow strict rules for product quality, like ISI rating or BEE rating for electrical/electronics products, etc. Chinese imports seldom comply to such quality control, they even sell illegal mobiles without IMEI numbers to cut cost!! We should stop importing everything that we can produce here sufficiently, or at least we should use all available methods within the law including trade barriers, excise, etc. to make Chinese products fairly priced, that is the real prices without Chinese Govt. benefits, so that our own products remain competitive.

Just look at our consumer durables industry, we had very strong & reputed Indian brands like Godrej, Voltas, Onida, BPL, Videocon, and many more selling high quality products, now the major players in consumers durables are Korean companies. Govt. should have helped the Indian companies with some benefits to protect them from loosing the market to Koreans, ultimately nation's wealth is going away along with employment.

 

[FaujHistorian]

Well said

Chinese and South Koreans are taking the whole world on with products that beat on quality and price and perhaps both.

Indian factories are cooked unless the government does something quick

 

[Genesis]

That's primarily because China gives huge subsidies, tax waivers & all other facilities and actively promotes manufacturing. India should also give manufacturers similar incentives to compete with the Chinese, Chinese labour is not cheap anymore. But no, Govt. is doing everything to discourage industry.

And why such a sharp increase in imports, Chinese imports to be specific, in last few years? Why such permission was given and for whose benefit? There are some big retailers like Big Bazar who have become Chinese malls. There are many ways to protect indigenous industry, and any sane country should do that, especially when we have so many low-skilled & semi-skilled labour available in our country and they are desperately looking for jobs. While Indian manufacturers are needed to follow strict rules for product quality, like ISI rating or BEE rating for electrical/electronics products, etc. Chinese imports seldom comply to such quality control, they even sell illegal mobiles without IMEI numbers to cut cost!! We should stop importing everything that we can produce here sufficiently, or at least we should use all available methods within the law including trade barriers, excise, etc. to make Chinese products fairly priced, that is the real prices without Chinese Govt. benefits, so that our own products remain competitive.

Just look at our consumer durables industry, we had very strong & reputed Indian brands like Godrej, Voltas, Onida, BPL, Videocon, and many more selling high quality products, now the major players in consumers durables are Korean companies. Govt. should have helped the Indian companies with some benefits to protect them from loosing the market to Koreans, ultimately nation's wealth is going away along with employment.

lol

You think giving subsidies is everything? It's a lot more to that. That's like saying to go to Harvard all you need to do is study. India cannot enact those same subsidies and create a good working condition. It's not a conspiracy thing, it's a you can't do it thing.

Everything sounds easy on paper, but put it into practice and even making a pencil is difficult.


As to imports, Indians still need stuff, since India can't produce them and American goods they can't afford, guess who they'll have to buy. Besides, Chinese goods are quality now days, as long as you buy from a reputable brand. Still cheaper than most.

Chinese products' price have something to do with subsidies sometimes. Mostly it's the huge orders from around the world, the great management, the willingness to work, and terrific sales teams and what not.

Your thinking that Chinese government is cheating you is just masking your problems by not addressing them. China produces for all over the world, we make way more than you so our factories can still make a healthy profit on lower prices. While India cannot do the same.


We are just better, plain and simple.

BTW, our universities are better than yours from every ranking in the world. So don't pretend like we somehow cheated Indian graduates out of wealth. No we are just flat out better.


Don't hate the player, hate the game.

 

[MastanKhan]

Hi,

I went to pakistan in 2007-----. I was looking at some furniture for he house----it was a surprise for me to learn that good quality solid wood pakistani living room furniture was more expensive than the chinese.

 

[Chronos]

lol




Don't hate the player, hate the game.

That's why I am living in a western country and not in China either.

 

[my2cents]

In your globalised world we get stuff from different sources and different countries. We should improve on our strengths and big scale manufacturing is not one of them. We should work on improving our small scale industries and cottage industries. They are non polluting plus they are not capital incentive.

 

[Hypersonicmissiles]

Indians are anti-business people. That's why their economy is doing poorly.

Too much red tape, too much anti-business sentiment, too much jingoism and too much corruption.

So many sectors in India is closed to foreign business, the barriers to entry for a business are too high, the currency is collapsing causing high inflation which makes importing raw materials and components too expensive to manufacture.

The other thing is Indians are too stupid to understand how economics work. That's why all the non-western advanced economies with no natural resources are all East Asian economies. Places like UAE and Qatar are just rich due to oil.

East Asians are the only group of people that can challenge the west.
The average East Asian is just as smart as the white western man.
In India the average Indian has too low IQ with the odd smart person. To be a developed country, you must have the average person with high IQ. That's how the overall country develops. Odd smart person is not enough to lift the whole country.

India has been and will forever be the poor man's China.

This will never change.

 

[Mike_Brando]

Indians are anti-business people. That's why their economy is doing poorly.

Too much red tape, too much anti-business sentiment, too much jingoism and too much corruption.

So many sectors in India is closed to foreign business, the barriers to entry for a business are too high, the currency is collapsing causing high inflation which makes importing raw materials and components too expensive to manufacture.

The other thing is Indians are too stupid to understand how economics work. That's why all the non-western advanced economies with no natural resources are all East Asian economies. Places like UAE and Qatar are just rich due to oil.

East Asians are the only group of people that can challenge the west.
The average East Asian is just as smart as the white western man.
In India the average Indian has too low IQ with the odd smart person. To be a developed country, you must have the average person with high IQ. That's how the overall country develops. Odd smart person is not enough to lift the whole country.

India has been and will forever be the poor man's China.

This will never change.

okay you have earned your stipulated remuneration for this "amazing" post

 

[chhota bheem]

Indians are anti-business people. That's why their economy is doing poorly.

Too much red tape, too much anti-business sentiment, too much jingoism and too much corruption.

So many sectors in India is closed to foreign business, the barriers to entry for a business are too high, the currency is collapsing causing high inflation which makes importing raw materials and components too expensive to manufacture.

The other thing is Indians are too stupid to understand how economics work. That's why all the non-western advanced economies with no natural resources are all East Asian economies. Places like UAE and Qatar are just rich due to oil.

East Asians are the only group of people that can challenge the west.
The average East Asian is just as smart as the white western man.
In India the average Indian has too low IQ with the odd smart person. To be a developed country, you must have the average person with high IQ. That's how the overall country develops. Odd smart person is not enough to lift the whole country.

India has been and will forever be the poor man's China.

This will never change.

We Indians are anti business,with low IQ for everything the govt tries to improve the Indians question the govt and some of the decisions are even challenged so it takes time,In china you guys have very high IQ that helps a lot for govt to make decisions as they are never questioned.In India there is a sayig,everything that glitters is not gold.

 

[dray]

lol

You think giving subsidies is everything? It's a lot more to that. That's like saying to go to Harvard all you need to do is study. India cannot enact those same subsidies and create a good working condition. It's not a conspiracy thing, it's a you can't do it thing.

Everything sounds easy on paper, but put it into practice and even making a pencil is difficult.


As to imports, Indians still need stuff, since India can't produce them and American goods they can't afford, guess who they'll have to buy. Besides, Chinese goods are quality now days, as long as you buy from a reputable brand. Still cheaper than most.

Chinese products' price have something to do with subsidies sometimes. Mostly it's the huge orders from around the world, the great management, the willingness to work, and terrific sales teams and what not.

Your thinking that Chinese government is cheating you is just masking your problems by not addressing them. China produces for all over the world, we make way more than you so our factories can still make a healthy profit on lower prices. While India cannot do the same.


We are just better, plain and simple.

BTW, our universities are better than yours from every ranking in the world. So don't pretend like we somehow cheated Indian graduates out of wealth. No we are just flat out better.


Don't hate the player, hate the game.

Who said Chinese are cheating us, they are doing what is good for them. But we should also do what is good for us. I am talking about things that we already manufacture in our country, and with little Govt. encouragement they can compete against any foreign player. Because of the Govt. policies setting up and running a manufacturing unit has become too difficult in India, big companies like Reliance & Tata has 50% or more investments outside India for this reason.

There are a few high-tech things like military, network, and medical equipment that we don't produce in India, rest we do produce in India, so we can easily limit our uncontrolled imports by private players in those segments.

Hi,

I went to pakistan in 2007-----. I was looking at some furniture for he house----it was a surprise for me to learn that good quality solid wood pakistani living room furniture was more expensive than the chinese.

Trust me, those desi solid wood furniture are far more durable and can remain new for ages with a polish periodically than those plywood furniture from China, Thailand, Malaysia, etc. But yes, a solid teak wood furniture will be costly, a mehgani wood furniture will be even costlier, but worth every penny, your great grand children will be able to use them without any trouble.

 

[dray]

In your globalised world we get stuff from different sources and different countries. We should improve on our strengths and big scale manufacturing is not one of them. We should work on improving our small scale industries and cottage industries. They are non polluting plus they are not capital incentive.

But we need big scale manufacturing to provide jobs to our huge numbers of low-skilled & semi-skilled workers, not everybody is qualified for service industry. And small scale industries and cottage industries have its limitations, however, especially the Chinese imports are hurting that sector also, why do we need Chinese stationary, low-end electrical/electronics goods, toys, and even idols and diwali lights to compete with our small & cottage industries? Things were not like that a few years ago, it was the Govt. policies that are to blame.

Indians are anti-business people. That's why their economy is doing poorly.

Too much red tape, too much anti-business sentiment, too much jingoism and too much corruption.

So many sectors in India is closed to foreign business, the barriers to entry for a business are too high, the currency is collapsing causing high inflation which makes importing raw materials and components too expensive to manufacture.

The other thing is Indians are too stupid to understand how economics work. That's why all the non-western advanced economies with no natural resources are all East Asian economies. Places like UAE and Qatar are just rich due to oil.

East Asians are the only group of people that can challenge the west.
The average East Asian is just as smart as the white western man.
In India the average Indian has too low IQ with the odd smart person. To be a developed country, you must have the average person with high IQ. That's how the overall country develops. Odd smart person is not enough to lift the whole country.

India has been and will forever be the poor man's China.

This will never change.

Don't you think that low IQ thingy has become very boring.

 

[Levina]

Trust me, those desi solid wood furniture are far more durable and can remain new for ages with a polish periodically than those plywood furniture from China, Thailand, Malaysia, etc. But yes, a solid teak wood furniture will be costly, a mehgani wood furniture will be even costlier, but worth every penny, your great grand children will be able to use them without any trouble.

Tell me about it....
Few weeks back at IKEA I picked up a "Made in china" pan.Hubby objected and predicted like a Nostradamus that it wont last a week.But...you know me...I am stubborn.
My reasoning was IKEA's products atleast last 6months.But a week later when the "non stick" layer of the pan peeled off ,my hubby was proved right.
I guess its the predatory prices that works for the Chinese products....and compared to Indian products the Chinese products are sold at 10-70 percent lower prices.
Our govt better buck up and do something....though its already a lil late.
Talking about the Korean products....KIA motors is what comes to my mind.Just recently I spotted one of their cars which looks exactly like a Lexus...gosh I was really confused for a moment.

 

[Armstrong]

Tell me about it....
Few weeks back at IKEA I picked up a "Made in china" pan.Hubby objected and predicted like a Nostradamus that it wont last a week.But...you know me...I am stubborn.
My reasoning was IKEA's products atleast last 6months.But a week later when the "non stick" layer of the pan peeled off ,my hubby was proved right.
I guess its the predatory prices that works for the Chinese products....and compared to Indian products the Chinese products are sold at 10-70 percent lower prices.
Our govt better buck up and do something....though its already a lil late.
Talking about the Korean products....KIA motors is what comes to my mind.Just recently I spotted one of their cars which looks exactly like a Lexus...gosh I was really confused for a moment.

I have a Chinese cell-phone that has lasted 7 years !

Maybe the Pan didn't like you that much because of your rather brutal use of it in beating the kids, the in-laws & the neighbors into submission !

Or maybe your Hubby, just so he'd be proved right, damaged the pan so that he could then do a Victory Dance proving himself right & proving you wrong !

Or maybe you should realize that when it comes to China - You Get What You Pay; which is to say they've got every grade of quality proportionate to its price available !