There is a need to grow domestic manufacturing, private sector participation and boost job creation, according to RC Bhargava, Chairman, Maruti Suzuki India Ltd.
Speaking at the 39th Annual General Meeting (AGM) of the company, Bhargava said that socialisation of manufacturing costs has made the sector uncompetitive.
“There has to be a national consensus on the need to grow manufacturing and on the need to create jobs. And the strategy for growing manufacturing, now I think there can be no two opinions on the way to go forward. There needs to be national consensus on this. If that happens, the kind of changes that are required becomes much easier. They will happen much faster,” Bhagava said.
“So, my approach into this is to say that all of us should understand the changes that are required, participate and support the Government policies to bring about the changes and make India a more competitive manufacturing country,” he said.
Highlighting the lacunae that hamper the growth of manufacturing, Bhargava said, “One has to understand the various constraints which apply to a democracy like us. Like the political situation which we have and steps which any Government will take have to be consistent with all the factors of the country, not just say that we will do whatever is required for manufacturing and then ignore all the other factors.”
Soviet policies
“We must remember that the initial problem with manufacturing growth arose because we adopted the Soviet policies or they were based on the Soviet policies of economic development. And at that time, these policies looked very attractive to a large part of the world and what we did was consistent to what a lot of people were advocating at that time. However, as time passed it was apparent that these policies were not delivering the results,” he said.
“The unfortunate part is that we didn’t change with time. And we persisted with the same set of policies even though they were failing to deliver results. Amongst these policies which led to the non-competitiveness of the industry were the Government’s efforts to cross subsidise and bring about socialism, by making industry pay for various kinds of economic activities and infrastructure which was required both by the people of the country and by the industry,” Bhargava added.
But this led to the cost of production going up and was one of the factors why we were not competitive, he said.