Tuesday, February 10, 2015

To make in India we have to break the fakes.

Since his election the Prime Minister has laid great emphasis on improving the manufacturing sector in India under the slogan of ' Make in India '. Over the next 3 years our expenditure on defense is expected to be $247 billion and if a part of that can be made in India the saving will be huge, not to mention the millions of jobs created in ancillary industries. At present we import much more than we export, always running a Current Account Deficit, although this year we may show a tiny surplus because of the drop in the price of oil. The reason we cannot sell abroad is because we do not innovate so there is no reason why anyone should buy anything produced by our companies. Since independence the Congress Party's infatuation with socialism meant that our industries were protected from foreign competition, so there was no need to spend on research. We had a huge and growing population so there was a lucrative market right here. Why bother with exporting when you could make any rubbish and people would be forced to buy them because there was no alternative. The Ambassador car was the stereotypical example. It was a replica of the British made Morris Oxford, of 1950s vintage, and had a monopoly in India. Fifty years back an Ambassador cost Rs 30,000, which would have bought a spacious bungalow in Delhi, and there used to be a 3 year waiting list for a new car. As soon a Suzuki was allowed to manufacture in India, under the brand of Maruti, people stopped buying the Ambassador and it was surviving on government orders. Last year it died. Our fellows have been surviving on reverse engineering foreign products and then producing cheaper copies to sell. The sale of generic versions of drugs is a source of friction with the US but our fellows have been punished for impurities in drugs sold in the US. We cheat even while cheating. The government mandated portability of cell phone numbers in 2011 but our fellows twisted it to mean changing from one service provider to another in the same area. Since they are all equally bad not many people bothered. They do not care for long term customer satisfaction for short term price gouging through roaming charges. Last October during the festival season in India sales at stores in shopping malls fell by 30 to 40%. The shops blame online retailers for the drop in sales but do not ask consumers about their shopping experience. Shopping malls sell mainly branded products which are expensive but have limited choice. There is no where to sit when one person is in the changing room, trying on a garment. Restaurants have crammed as many tables as possible and play ear-splitting music to stop eavesdropping of conversations. So what have they done to increase footfalls. They have jacked up parking charges by over 80%. Wonderful. Crooks cannot make, they only crook.

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