Page 77 - IMDR EBOOK 20 OCT 2020

"Pandemic and Beyond: Naviga ng the New Normal" E - Book Year 2020

2. Bureaucracy must develop and practice an attitude of trusting the entrepreneur.
Surprisingly, still there is a sizeable trust decit existing between the two.

3. Electricity will have to be reliable and cheap. Currently, the average availability
of electricity to industrial sector is 17 – 18 hours a day and the average rate is
around Rs 8 per unit. In China, electricity is 24 hours and at Rs 5.50 a unit.

4. Roads, Transportation and Ports will have to be improved to world standard.
5. Local political interference in recruitment of casual labour, services contracts
and other such aspects must stop forth with. No such thing exists in China
and obviously investors will consider this intolerable.

6. Set up a hassle-free system to incentivise industrial units.
7. Incentivise the government ofcials for achievements.
8. Punish non-performance and corruption swiftly, severely and visibly.

9. Enforce what is known as Contract act and create visible examples of having
done so.

Long Term (0 – 5 years):
1. There must be a World-Vision at apex level in government which should be
beyond import substitution and of becoming a Global player in manufacturing. The
swadeshi movement being propagated is too myopic compared to the larger objective.
2. All political parties must be on the same page and in line with Centre on the
subject of foreign investment. On this one issue, political games between various
•
parties must take a back seat.
3. Strong and innovative steps needed to bring mind set change towards approach
to “work”. This can be brought about by adopting what other countries do such as
showing documentaries of Chinese, Japanese and Korean workers. Conventional ways
of `preaching` etc. have never worked and shouldn`t be tried now at this stage.
4. Skill India should be rejuvenated and freed from the bureaucratic manner in
which it is being implemented.
5. Laws dealing with corruption need to be changed and quicker, effective disposal
of proven corruption cases should be made possible.
6. Education system, not just the IITs and IIMs, but at all institutional levels,
should be aligned to local industry with accountability on industrial units to contribute
to education.
India does stand a chance of attracting industries which are leaving China. However,
with this opportunity there is also an element of competition. Malaysia, Philippines,
Thailand and Vietnam have already started taking away the units. According to one
source since January 2020, these 4 countries together have signed 51 agreements with
such investors who were seeking options to China.
Last important thing is now speed of action is the key. We will have to accept this, adopt
it and put changes in place under any circumstances. There is not time for “Dheere

References
https://www.investopedia.com/articles/investing/102214/why-china-worlds
factory.asp
Why China Is "The World's Factory"
https://www.stlouisfed.org/publications/regional-economist/april-2016/chinas
rapid-rise-from-backward-agrarian-society-to-industrial-powerhouse-in-just-35-
years

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