How they killed our factories

The government of India, it seems, has decided that factories must not be allowed to come up or to run.

Written by Jaithirth Rao | Published:January 20, 2014 2:01 am
We are one hundred per cent different from China, at least as far as manfacturing and factories go. Reuters We are one hundred per cent different from China, at least as far as manfacturing 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

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  1. A
    Ajay Nagre
    Jan 20, 2014 at 9:12 am
    Is this a spoof? or the usual propaa with a mixture of facts and fiction?
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      Chandru
      Jan 21, 2014 at 4:06 am
      The article is absolutely true.I narrate my experience in manufacturing as a SSI;I had about 10 years experience in 3 leading multinational engineering companies in India in addition to degrees from IIT and IIM.I with my partner,who is a marketing professional, started a SSI about 15 years back. Slowly our manufacturing share started going down and my expertise in engineering is no longer needed/relevant and thank God to my marketing partner we are surviving purely by selling and distributing products not made by us.now we are looking for "Technical products" to sell not to make.our biggest challenges are not engineering- but : ESI and Taxes and how to counter our compeors who sell products without bills and taxes !
      Reply
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        Chanakya Ganesh
        Jan 25, 2014 at 9:37 am
        Sonia wants to create jobs in USA , Italy EVEN in CHINA in exchange of some big amount of yens but never allow Indians to create jobs because if you have jobs , you will be happy and will think ; they want sad poor people who accept their gifts and money so that you may vote for them
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        1. M
          m
          Feb 6, 2014 at 8:15 pm
          Blah blah blah blah
          Reply
          1. M
            m
            Feb 6, 2014 at 8:15 pm
            Blah blah blah blah
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              ASHI
              Jan 20, 2014 at 7:38 pm
              We are moving from agrarian to service directly thus jumping the era of industrialization. No Harm. We will be Intellectual power.
              Reply
              1. N
                Nitin
                Jan 20, 2014 at 5:17 am
                Excellent Article. The satire is really enjoyable but makes you think that it is entirely possible that this is what is seriously happening with those who decide the policy. What Mr. Rao has expressed in a rib tickling way is exactly what we, small scale business operators, discuss when all the partners in pain happen to get together for a mug of beer. The reference to Oman was uncanny; how did you get to know my business plan? I have never met Mr. Bhasin, or is everyone thinking the same way?
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                  rakesh
                  Jan 21, 2014 at 6:09 am
                  great one. Got some light on the Industrial policy we follow. I also often feel even our God statues are made in China, a small pen is from there, what are we doing.
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                  1. R
                    RJ
                    Jan 26, 2014 at 2:05 pm
                    Brilliant piece by Rao, one of his best!
                    Reply
                    1. S
                      shekar
                      Jan 25, 2014 at 3:28 pm
                      Excellent Article.. Mr Anand Sharma, please read this article. This is one of the very rare articles I have seen in the media for a long time.. These are the articles which will wake up our people and realize the mistakes that we (our govt) is making.. We need to protect and promote our industries.. great article Sir, thank you..
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                        nbp
                        Jan 26, 2014 at 5:44 pm
                        Truely, there is hardly any encouragement from government, or even the society. The only encouraging thing from government is they allow any one of us to start business. Thanks for this. Beyond that zero support. Even society, no one wants to work in factories, esp ssi.The attrition rate is very high, though ssi are most efficient and provide best opportunity to hard working persons. Added to this our education quality has deteriorated, that fresh graduates are not usable , And are not interested in ssi work.
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                        1. T
                          tabrej
                          Jan 26, 2014 at 5:11 am
                          Very true. We need another Swadeshi movement. Right on 26th Jan I can hear many patriotic music playing at various locations but sadly the player and CD are made in China. I am not against of any country or individual but without industries we are loosing lots of things.With proper rule and regulation we can have industries running clean and evironmental friendly (not 100% but atleast 60-70%) with many jobs and most impotantly the thinking of swadeshi, self dependent.
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                            Ramesh Tr
                            Jan 26, 2014 at 5:18 pm
                            This brilliant article by Mr. Rao highlights the alacrity with which our Government has systematically destro local manufacture. Where will this destruction lead to?
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                              trupti_inlaw
                              Jan 20, 2014 at 3:18 am
                              There is corruption and greed for easy money in the system especially the society at large, specifically the NGOs (many work as PR firms for the sponsors pushing their agenda ) . The general presumption is that the one who has put up a factory has pots of money to invest, forget that one takes a loan and cash flow is very vital for the the business to run and he needs to grease too many hands in the process, this is what is disheartening people from taking up the idea of making factories or industries.
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                                sachin
                                Jan 21, 2014 at 8:10 am
                                There is also a dimension to crisis we have..Land prices have gone up. Politicians are grabbing public lands at cheap prices and setting up their businesses. So for a businessman, cost has gone up and compeion has increased because some other is taking advantage of being in power.... Also , please do post a write up on how FDI in retail will help and how FDI in vitrtually everything will help....... Why can't government ask research organizations to put up cold storage facilities ? Why can't supply chain become a subject for enterpreneurs of India ans students in grad colleges ? Why we have to ask for big companies to come and expect our students to be given job and deliver at high costs ? I may not be economist like Dr MMS, however i know that growth comes when costs are low as people selling them can expect buying of goods from people.
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                                  Varun Mundra
                                  Jan 25, 2014 at 1:05 pm
                                  Well written!Speaks of the plight entrepreneurs are in the country!
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                                    shiva
                                    Jan 21, 2014 at 1:11 am
                                    The entrepreneur who runs a factory despite heavy odds deserves Bharat Ratna.
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                                      T Yagi
                                      Jan 25, 2014 at 8:34 am
                                      100% True,,, Can't agree more with it !!!!!!!!!!!!!!!!
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                                        zulkharnine sultana
                                        Feb 8, 2014 at 2:02 pm
                                        This article is discouraging the peoples of India.We can develop India with our own ideny, with unity and integrity,not with comparing with other countries.
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                                          zulkharnine sultana
                                          Feb 8, 2014 at 2:02 pm
                                          This article is discouraging the peoples of India.We can develop India with our own ideny, with unity and integrity,not with comparing with other countries.
                                          Reply
                                          1. Z
                                            zulkharnine
                                            Feb 7, 2014 at 4:49 pm
                                            THIS ARTICLE IS DISCOURAGING THE PEOPLES OF INDIA WE ARE INDIAN SHOULD LIVE LIKE INDIAN.WE CAN DEVELOP INDIA WITH OWN UNITY INTEGRITY,NOT WITH COMPARING OTHER COUNTRIES BY ZULKHARNINE SULTANA HYDERABAD
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