Athmanirbhar funding for the government to Make in India

Two thoughts of this government are laudable and critical for future of India as a country. One is Atamnirbhar Bharat (I did share my thoughts on it- The other one is Make in India.

What is make in India and why it is so important? Make in India is devised to transform India into a global design and manufacturing hub. It is designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country. Let me tell you – Make in India is much more than an inspiring slogan.

The question here is – Are we able to move ahead with Make in India? Is India really taking giant steps to become a manufacturing hub? I believe Atamnirbhar Bharat and Make in India need to be looked together.

Make in India will only be successful when India will move towards self-reliant. Since Independence, several governments tried implement Make in India in phases but first time a coherent strategy is formulated to achieve the same. First it was in the late 1950s when then PM Nehru took a concerted effort to create large scale industries like Refineries, Fertilizers, Steel and Power plants. The second wave was when India went for green revolution to produce grains in large amount to feed its population. The third wave came in 1980’s when lot of companies like Suzuki, Honda in collaboration with Government of India setup manufacturing units in India; and finally post LPG (Liberalization, Privatization and Globalization) in 1990’s -a lot of private companies set up offices in India and Indian Businessman’s started new companies. It is important here to note that despite all these steps taken by various governments, we are still far away from becoming a manufacturing hub or self-reliant.

Where did we go wrong? I feel successive governments post LPG took place in 1990’s missed one strategy which costs India in becoming the manufacturing hub it inspired to be. There is a saying that one needs to invest today to reap benefits tomorrow. Anyone closely observing the approach of the governments in last 20 years will see they all have increased the pace of disinvestment. There is nothing wrong in it as they are trying to make money out the investments made in the past. It helped the government generate money to fund social and other welfare schemes.

This brings me to my next point – Successive governments stopped investing or creating new companies specially post LPG. LPG never meant that Government will not create companies. They had a great opportunity to push Make in India. The biggest miss was in the decade of 1990 when government completely stopped investing and creating new companies. I always believe the Government have the best of the resources and have no doubt if given the right environment why they cannot create companies like google. If anyone has doubt just check companies like IOC, GAIl, LIC, SBI others. They are all very successful companies run by the government.

Many governments around the globe invest money, energy, time and resources to create world class companies. Here is a simple suggestion: We know the Government is inviting private companies to run trains in India. Why doesn’t the Government of India create a company which functions as a private organization for running these trains. They could have sold the stake or raise money in future by selling or raising money through IPO’s.

In modern day business, Government can approach this in a few steps.

  • Step 1- Create a company with group of people whose target is to identify future opportunities, analyses and present them to the government.
  • Step 2- Once approved, it moves to a second company which sets up and gets the business running.
  • Step 3- If needed, it can create a separate entity who runs the newly founded company for the long term.

There are always opportunities. The Government can explore investing in electric vehicles, clean energy or in new agricultural technology. Few will argue that government job is look after Infrastructure and social welfare of the people, but my dear friends – Money is also required for these works. Raising taxes is never going to be viable option for a country which has already high tax rates, so the Government of the day must find other ways to increase its revenue. As I told you, the best way is to invest today and get benefitted tomorrow. It needs to be a continuous process.

The Government needs to revisit its strategy, lest in few years it will not have assets to sell and might struggle for funds. Time to re-invent the wheel of investment and focus on creating large scale enterprise. This will be the best way to achieve Make in India and create a self-reliant India.

Corporate life is more than it meets the eye