Manufacturing Council takes on ministries

‘‘The NMCC will never support subsidies or procedural hurdles like inspector raj. Removing these require a fair amount of investment, but are ministries and government departments equipped to take those decisions? And are they in a mood to assist you in doing that?’’ Krishnamurthy said on Friday at an interactive session on the Council’s recommendations.

The UPA government is trying to achieve 8 per cent GDP growth rate, which requires manufacturing to double contribution from 17 to 34 per cent. The objective of NMCC is to find ways to raise the growth rate of manufacturing to at least 12 per cent (7 per cent now), so that the targets are met.

‘‘To change the way of working of Ministries would not be easy, it will be tough,’’ Krishnamurthy said. ‘‘We will be able to bring about the necessary changes, and if not, there will be a very heavy price for India to pay,’’ he said.

For instance, NMCC believes the textile business needs to grow to ten times its current size, while the employment-intensive leather industry needs to grow from $2 billion to $7 billion in 10 years. ‘‘It is a question whether existing organisations within the Ministries would be able to take action on these needs,’’ Krishnamurthy said.

But on the most-mentioned labour law issues, Krishnamurthy said India can wait a while. He said Steel Authority of India Ltd, for instance, produced 1.7 million tonnes of steel in the 1990s with 75,000 people. Today, producing 7 million tonnes, its employment has shrunk to 45,000.

‘‘Labour issues are a problem, but not so large that we can’t surmount. Some members of the Council may not agree, but I believe that with employment in industry shrinking over a decade, is this the right time to go to Trade Unions and say we want reform?’’ Krishnamurthy said.

In addition, despite restrictions on hire-and-fire, the share of contract labour employed has grown from 8 to 23 per cent over recent decades.

‘‘A certain amount of social security and welfare has to be combined with changes in law. I am 100 per cent sure we can amend the laws, but the less we talk about it the better — lest we create resistance,’’ he said.

The NMCC is veering around to the view that to mimic China’s industrial growth, India may also have to mimic its dormitory facilities for workers, and provide subsidised canteen facilities to workers laid off in the ‘‘off’’ seasons.