China is beginning to vacate some space of low-cost, labour-intensive manufacturing as the country’s per capita income increases. Unfortunately, India is not among the beneficiaries. It could quite easily have been. Does it not reflect on Indian weakness when India goes down to Bangladesh or Vietnam in manufacturing through low-cost industries and that too because of its policies? As Mc Kinsey reports, Bangladesh is the next hot spot and the country’s ready-made-garment industry identified solid apparel-sourcing opportunities. Why has India with the great past of textiles and with maximum producer of cotton failed to remain high? It could have provided millions the necessary engagements and means to remain out of poverty?
Indian small businessmen keep on talking about the long hours of power cuts, the high cost of every infrastructure input, the slow turnaround time at ports, labour law, and of course red tape and inspection raj as excuses. But most of them wish to make big money in easy way rather than having a mission to create jobs for the needy country men with some investment and hard work in manufacturing.
The hero of 90’s revolution is in mute and ‘statue’ mode. The political class is too busy in everything else but helping to raise the development speed of the country.
India’s young entrepreneurs, business leaders, and society have overlooked the potential of rural India in multiplying the manufacturing potential of India by taking it to the unemployed cheap rural labour. Organizing the rural potential with selecting and training interested groups for some outsourced work would have kept the cost down in many of the manufacturing jobs for the producing the things required for mass use.
The government has failed effectively in providing electricity without which nothing gets produced these days in competitive manner. Not that there are no rural ventures, but it has not penetrated and scaled up to the desired extent.
In a similar manner, India is missing the bus in BPO sector too. As reported, in a 2008 report NASSCOM and Everest, the Indian BPO industry would have earned $30 billion from exports by 2012. However, in the last six years, voice contracts coming to India, as estimated, have fallen by half. The industry may clock less than $16 billion this year, and it is all because Indian entrepreneurs and education system failed to provide the right spoken skill for that type of work. Is it not surprising that India has lost to Philippines? And the loosers are the young boys and girls with education up to class X or XII standard with good communicating ability in English from lower middle class, and not the established entrepreneurs who switched over the location or upgraded the work and the services of much higher value additions. But every one can’t pick up the high end BPO that requires higher education and better domain knowledge.
Philippines became the biggest provider of voice-supported services as its BPO industry jumped 21 per cent to $10.9 billion. As reported in ‘Business Today’, ‘at pure voice operations, the Philippines, with $5.2 billion in revenues, has already become No. 1 in the world, pushing India, at $4.8 billion, into the second spot’.
India must go for few policy decisions for creating industries that will provide jobs for the new generation that is getting into the market. Indian PSUs such as BHEL and BMEL, must grow much bigger outsourcing whatever can be done with the vendors. Defense production must encourage the private sector to enter and establish factories. Indian policy makers must realize the extent of national loss by opting for import rather for local manufacturing of the huge defence requirement. ISRO and other high tech establishments as well as the national research establishment such as CSIR and DRDO must help establishing manufacturing facilities in the country as a national mission and take the country forward in manufacturing of electronics.
Let India not miss the bus this time.