Close to six months after Prime Minister Narendra Modi announced the Make in India programme, it has caught the imagination of an industry longing for a panacea to a tentative industrial revival.
Symbolic of the 360 degree support that it has got, foreign investors, Indian businesses and the public sector have given their vote of confidence. The latest HSBC Purchasing Manager Index for the manufacturing sector has seen a two year high in December. Earlier, a McKinsey analysis found that rising demand and multinational corporations’ (MNCs) desire to diversify global production bases to India could help the country’s manufacturing sector grow six-fold to $1 trillion by 2025, while creating up to 90 million domestic jobs.
New approachesIf these are indicators that there could be a manufacturing revival in the country in the coming years, it would be useful to proactively ponder on its implications.
The Make in India campaign and the government’s new reform thrust could bring in new approaches to manufacturing. A commitment to deliver on labour reforms could see collaboration and constructive dialogue between corporates and trade unions with compliance and fair play as the cardinal rules of engagement.
As proof of this commitment, in the early days of the new government, it amended some of the provisions of the labour laws that pertained to the system of inspection of companies, where factory inspectors will no longer be able to visit companies of their choice and make unreasonable demands.
This will be aided by a computerised database system and time limits for filing reports. Companies can submit one compliance report for 16 labour laws through the Shram Suvidha portal.
A whole army of employees that companies used to have to manage the earlier environment may soon be redundant.
At another level, focus on social responsibility and recognition that companies are business and social entities at the same time could see local workers being hired in greater numbers. Renewed interest from Japanese investors in the aftermath of the Prime Minister’s visit to Japan could revive interest in the drive for quality and competitiveness on the shop floor.
Private partnershipsThe opening up of areas like Defence and Railways is likely to bring forth more private partnerships with the public sector that could infuse a new work manufacturing work culture in these traditionally staid companies.
With increasing recognition for diversity in companies, women and the youth could get a leg up. Skills and vocational training could ensure larger numbers of youth being absorbed into manufacturing facilities which could also help alleviate youth unemployment in different parts of the country.
Supply chain management and vendor development that had lost some of their relevance in the efforts of manufacturing companies to cut costs may make a comeback with industry committing greater investments in these areas. On the other hand, the promise of greater use of technology in Indian manufacturing as posited by Microsoft’s Nadella could see the need for retraining workers at factories to bring them up to date on global technology and innovation practices.
With the Chinese economy losing steam of late, MNCs that had a dominant position in China have been investing in India among other alternative destinations to develop them as global manufacturing hubs. But, MNCs that have entrenched global best practices in manufacturing will learn that they need to inculcate localised practices to suit the Indian environment.
The writer is a Delhi-based author and journalist