दृष्टिकोण – Indra's Viewpoint

Today morning I went to Sector 50 Park instead of the usual one in Sector40 of Noida. As suggested, I go out a little late at around 9AM in winter because I am heart patient. It is comfortable temperature wise by that time. The walking track is about 700 metres across the periphery of the park. Plantations have still not grown to its heights. On one side there is one school for tiny kids and a huge residential housing complex is coming up nearby. On my first round, I found two boys coming to go their school well loaded with bagful books. I talked with them and encouraged them to work hard and study seriously, as that will make them own houses like one their parents are helping to build. The elder one told they have come from village recently. The younger was crying. Perhaps he was not willing to go to school. The older one also on his own told me that he is dumb. I requested him to take care of the young one more lovingly.

I moved on. When I was approaching the other side of the park, I found four kids well dressed in school uniforms with sweaters playing in the ground. I could guess they have bunked off the school. I moved on in that round. But in my next round I went to them to find out why are they playing and talked with them to find out why have they not gone to their school. Their parents must be thinking that they are in school, but they were wasting their time here. I talked with them for a while to tell them why they must go to school. They didn’t answer to my query first, but ultimately they picked up their heavy school bags and started moving out. I threatened to come to their shanties to meet their parents and complain. On my next round, I found them again outside the boundary wall, but they were not going to school. After I threatened again, they moved towards their school. I am sure they will not go to school, but play in some different place. And there will be hundreds and thousands of such kids.

How can this situation be avoided? How can the kids be made interested to go to school regularly? Are the teachers making the teaching interesting enough? One incentive for attracting them has been the mid day meal. However, I don’t know if it is strong enough incentive. How the parents can be convinced that schooling is necessary? How can they start taking interest in school activities? Many questions troubled me. Unfortunately, the parents in shanties are hardly interested. My wife got daughters of our maid admitted, but they never went to school. My wife keeps on telling Anandoo, the guard next door to send his son to school but he never did it. The government is doing its best to have universal education through different education schemes. The most publicized is the Sarb Shiksha Aviyaan. But still unless the parents of such children that I met in the park today get interested in educating their children, and teachers go out of the conventional way to make the teaching interesting enough and relation close to parental level, the scheme can’t succeed. Perhaps the country needs a scheme to educate parents more than that for the children. These parents must not think that the responsibility of education is that of the government.

Every now and then some volunteers visit our residences to find out if there is any child for polio drops in our knowledge. Perhaps the same volunteers can also enquire about the children that are not going to school. Our Resident welfare Associations or other similar associations can also have some drive to help universal education. Doctors can have some camps to tell the kids about the necessity of sanitation and hygiene. The senior people in locality can visit the schools and provide some moral boosting advices. On the whole, the society will have to take this responsibility at least for one generation to make the universal education drive a success.

It was interesting to read in an article by Vijay Kelkar, former finance secretary that ‘the total spending of the government of India on education, summing across Centre and states, divided by the number of children between ages 4 and 15, works out to roughly Rs 4000 per child per year. Any one in education profession will agree that it is feasible to get good quality schooling if you are willing to pay fees of Rs 4000 per child per year.

It can’t be just a government initiative.

As I spent almost whole of my professional career in automotive industry along with quite wide exposures of automotive industry in developing countries of both- west and east, any development allures me to write about it. So I wrote on hybrid cars and hydrogen cars. It was great news for me when I read a recommendation of a panel with Ratan Tata as head about hydrogen cars of India. As it appears, India is getting ready for fuel cell cars where hydrogen will be the fuel. With not much of internal fossil oil resource, the country will have to go for the new initiatives. But for the strong lobby of oil companies in US, hydrogen cars would have been reality by now. The middle course is hybrid vehicles where along with the petrol (gasoline) or diesel engine, electric motor and batteries are also incorporated to let vehicle run on electricity at low speeds. Mahindra and Mahindra will exhibit a hybrid Scorpio at the Auto Expo that is starting tomorrow. M&M has already developed the prototype that is undergoing test. As reported, the hybrid Scorpio can deliver about 30-80% more fuel economy. The engine shuts off as soon as the vehicle stops at traffic light, and starts off again with almost no idling that saves fuel.

Congratulations! Pawan Goenka, Good job done.

In US I had seen Toyota Prius commercially marketed and pretty popular with Americans. Naturally, hybrids are costlier. I had suggested in my earlier write-up that our government must give all tax concessions to Toyota and other to manufacture proven hybrid cars in India. It would have been a precious fuel saving and the most contemporary technology for the country. Chinese persuaded rather forced Toyota to manufacture hybrids. The car in coming days will have many new features that we could not have even imagined. Anand, my youngest son was describing his driving experience of Toyota Highlander, and just by hearing the whole thing I was getting excited. That had a GPS to guide the vehicle in a pitch dark snowy night, beside providing all other information like hotels of their choice and restaurant to make the long journey a pleasure of its kind. Here are some more developments that you may look for while visiting Auto Expo 2006 in next few days.

1.Sensors

Sensors will light up an icon on the instrument panel or sound a warning drone when drivers are veering out of their lane or are heading toward a possible accident
.
2.Horsepower

Even though fuel economy is hot, the horsepower war rages on. Amateur drivers still love to punch the gas pedal, and many newer cars are both responsive and efficient.

3.Air Quality
Germophobes will love new plasma-based technologies that release charged ions to filter out mold and bacteria. The result: Cleaner air inside than out.

4.Diagnostics
Carmakers are offering systems than can run self-diagnostic tests on cars, telling owners when the brakes, engine, or air bags need to be fixed.

5.Sound System
Soon you’ll be able to plug in your iPod or a memory card loaded with your favorite tunes and toggle from track to track using controls located right on the steering wheel. And ISRO is going to provide
easy access to TV channels.

6.Fuel Economy
Hybrid-electric vehicles, transmissions with up to eight gears, and high-tech gasoline engines are slowly but surely delivering the fuel economy gains that were promised back in the ’70s.

7.Navigation Systems
Navigation systems will tell you more than how to get there-soon they’ll tell you how not to get there. They will know where the traffic jams and accidents are, and they’ll eventually be able to tell you to slow down when coming up on a hairpin turn.

Are these not amazing things getting in your cars when you go for buying tomorrow?

P.S. Here comes Mahindra`s wonder car
For global carmakers, India is destination design
READ MORE ABOUT HYBRIDS
Hybrids or Diesels? Probably Both</POST

It has never been so good.
More than 400 M&A deals (over $18 billion in value)
 

Vodafone pays $1.5 billion for a 10 per cent stake in Bharti Tele-Ventures.
 Essar and Hutch take over BPL Mobile and BPL Communication for $2.1 billion.

 Videocon buys out CPT business of MNC Thomson US for $290 million.

 Matrix takes over Belgian company Docpharma NV for $263 million.

 Oracle buys out Citicorp’s controlling stake in i-flex for $593 million.

 Ratnagiri Gas and Power buys GE and Bechtel stakes of Dabhol Power for $305 million.

 Tatas spent Rs 4,500 crore to acquire global businesses. Tata Chemicals takes over Egyptian fertiliser firm SAE for $519 million. Tata Steel acquires Thai Millennium Steel for $400 million.VSNL buys Teleglobe Holdings for $254 million. TCS bags Australian FNS for $26 million.

 Essar Steel buys INI Steel for $100 million and Hy-Grade Pellets and Gujarat Steel for $450 million.

 Vijay Mallya’s McDowell takes over Shaw Wallace for $320 million.

Virtually every week an Indian company is acquiring a company abroad. Mahindra & Mahindra, Bharat Forge, or Wipro are perhaps in a hurry for going global in real sense of the term.

Sales and Profits 2004-5
 A sample of 1,765 companies shows that net profits for the first quarter of 2005-6 has jumped by 46.02 per cent, while sales clocked a 15.01 per cent growth.

Investments and investment intentions

 Foreign institutional investors pumped in a record $10 billion this year.

 The Centre for Monitoring Indian Economy reports that during the quarter ended October 2005, 564 projects with investments of Rs 2,11,054 crore were announced-the highest in a decade. Since March, IT and telecom companies have announced investments worth over $9 billion.

 An AT Kearney survey has ranked India the second most favoured destination for FDI, behind China, relegating the US to the third spot.

 The UN Conference on Trade and Development sees India among the “dominant host countries” for FDI in Asia and the Pacific.

Global tech titans’ investments of over $8 billion in the telecom and IT Sectors.

 Advanced Micro Devices signs a “milestone agreement” with SemIndia to bring semiconductor manufacturing facilities to India. The move envisages an investment of $3 billion over four years.

 Bill Gates, on his fourth visit in two years, announced that Microsoft Corp will invest $1.7 billion in India over four years and employ 3,000 more people to strengthen its presence in India.

 INTEL -the tech giant will invest more than $1 billion in five years. Plans include $250 million to be invested in a venture capital fund to help stimulate technological innovation in India and drive the growth of the country’s it industry.

 CISCO- the networking behemoth will invest $1.1 billion, including $750 million for an R&D centre.
Nokia, LG, Samsung and Alcatel are setting up manufacturing units in India to tap into the booming cellular services business.

IT Sector

The Indian IT industry has leapfrogged crossing of the Rs 1,00,000-crore mark in revenues and the direct employment of over 10 lakh personnel in software and services, with indirect employment being two to three times that number. Software and services exports grew by as much as 34 per cent in 2004-5, grossing over $17 billion (about Rs 76,500 crore). The forecast for the year 2005-6 is a further growth of 30-32 per cent. The national market too has seen vigorous expansion of about 25 per cent. The recent NASSCOM-McKinsey study projects a $60 billion (about Rs 2,70,000 crore) export figure in 2010 for the Indian software and services sector.

Consumers’ Economy

While all the information above shows the health of producers’ economy, here are some glimpses of consumers’ economy:

Number of new mobile users added till November 2005 is 23.41 million-highest in a year. Roughly a mobile phone is being sold every second.

45 million PCs have been sold this year that is the maximum in a year. Mutual funds raised Rs 53,982 crore in the first 11 months. And average increment in salaries in private sector was 14% the highest since 1990s.

And GDP

Even the PM is no more hesitant in talking about 8%+ GDP growth. India is huge mass flywheel. It has started moving- from the Hindu growth rate to 6% average, and then 7% for last few years, and now 8%+. Even with a slight increase in productivity of inspired individuals who contribute to the overall GDP, and perhaps by bringing in some innovations in all the individual assignments, the flywheel will get into speed that will be difficult to be stopped.

And finally, a late-year survey of Transparency International showed that corruption actually decreased in India. That itself can boost GDP by several points.

Arun Firodia, chairman, Kinetic Group keeps on expressing his views on rural transformation. It interests me. I am sure his ideas carry some freshness to bring out revolutionary changes in the quality of life in Indian villages even for governments with limited resources. I have met him once, but I don’t know if he has some root in village and first hand experience or he is just a thinker of the subject only. Here is the gist of some key points mentioned in his latest lead article in ‘Times of India’ editorial page:

World trade in food products, seafood, herbal products and flowers is about $395 billion. India ought to have a 20% share in this market, since India possess 20% of world’s irrigated land. Fortunately, nature has provided India with large tracts of fertile land, nine to 10 months of sunshine, average rainfall of over 1,000 mm and great biodiversity. India must leverage this to focus on export of a variety of processed food, seafood, herbal products and flowers. Rural India can become the world’s agribusiness powerhouse.

Banks can provide such finance and insurance companies the necessary cover. The government should exempt agribusiness units from income tax, sales tax and excise duty.

More than 25% of the farm produce is lost in storage and transportation. A chain of cold storages can be of great help. As I know government in many villages in Bihar got constructed ‘godowns’ in 70s or 80s that had never been used and are now depilated. I wish all the future rural projects in a village get developed in a cluster. Going by my own village or as I have seen in villages around mine, all the government owned buildings such as schools, panchayat, and godown are in different locations away from the main habitation. If they would have been one single cluster, it could have better use as well as supervision of their status by villagers.

Food Bank
Mr. Firodia proposes a new arm of the banks that are having some 68,000 branches all over the country called ‘food bank’. A food bank would own a cold storage unit and function like a safe deposit vault. A farmer could deposit his produce (or milk) in a food bank when he needs to and withdraw it whenever he chooses. A food bank should give him a loan against this security to help him buy seeds and fertiliser for his next crop.

Electronically wired food banks can act as commodity exchanges and help the farmer in deciding the right time and the right destination to sell his produce.
A food bank can lend to agribusiness units to help them modernise to international standards. It can even open a retail counter. A food bank can provide all these services at a much lower rate than the middlemen. That would increase farmers’ take-home sharply which he can then invest in his agribusiness.

Rural Bio-energy Cluster
Oil companies in the country could help create a bioenergy cluster in each village that uses locally available feedstock to produce biogas, biodiesel and ethanol.
India has 1250 million cattle. Cow dung coupled with other farm residue like rice husk can be a source to generate enough biogas. And the rural population can use it for cooking, running agricultural pumps, energising cold storages and powering transport vehicles. Biogas can also help in producing electricity, bio-fertilisers and bio-pesticides. Waste heat from the generating set can help in generating safe drinking water too.

Every village is having a lot of wasteland- a total of 41.5 million hectares in India. Rural population requires empowering to plant some 400 different types of bio-diesel trees like jatropha, neem and karanji. Seeds from these plants can produce enough bio-diesel to meet their requirement of diesel. Bio-diesel and ethanol can be sold to oil companies for further processing and blending with diesel and petrol. Carbon credits under Kyoto Protocol will improve the clusters’ economic viability.
India has 108 million hectares of non-irrigated farmland where farmers can grow sweet sorghum, corn or similar energy-rich plants or grass that can be the source for ethanol to meet our petrol needs.

The Agriculture Finance Corporation has estimated that an agriculture-led strategy can generate 7.5 lakh jobs in Pune district alone. If we implement this strategy in 350 districts we can create 270 million jobs. Banks and insurance companies will do a great social service if they encourage this concept.

With a liberal but responsible rather accountable credit policy and some rural level leadership, every village on its own can become prosperous. The major national political parties, both ruling and those in opposition that claim to believe in developmental politics must have post-election campaign to rebuild the country side on its on resources and must start using its cadre at village level for the projects such as those suggested by Mr. Firodia or other innovative ideas suggested by the grass root levels for improving the local conditions.

Prime Minister Manmohan Singh exhorts India Inc to brace up for a sustained 14% growth in manufacturing sector. The marginal improvement in the share of manufacturing in national income from 15.8% in 1991 to 17% in 2003 is of concern. PM wants it to be in the range of 25% to 35%. This requires manufacturing to keep growing at 12% – 14% in the next decade. PM emphasized, “Manufacturing has to be the sponge, which absorbs people who need to move out of agriculture in pursuit of higher incomes. I do not accept the proposition that India can skip the manufacturing stage of development and go from being an agrarian society directly to becoming a services and knowledge-based society. This is a mistaken view. A substantial manufacturing base is essential to absorb the workforce and ensure sustainable growth of the economy.”

As suggested by many consultants, India can be a major player in many sectors, such as in agro-processing, in textiles and garments, in automobiles and components, in pharmaceuticals, in chemicals and petrochemicals and in leather and footwear. PM urged industry ‘to have faith and take the plunge.’

The global auto giants are reeling under increasing cost pressure to outsource components. And what a huge potential! Global auto components consumption is expected to grow from $1.2 trillion in 2004 to $1.6 trillion by 2015. India is also catching attention for some of its unique advantages. India is also becoming a destination for outsourcing automobile R&D.

Why are we not getting a major growth in manufacturing sector? Indian firms are innovative too. Nearly 70 per cent of the companies, which were recently surveyed by Boston Consulting Group and Confederation of Indian Industry, stated that they were hiking innovation spend in 2006. Among the major rapidly developing economies, Indian firms were the most active innovators with over 1,000 patents filed out of a total 5,401 patents. There seems to resurgence in manufacturing sector. Many Indian companies are going global.

As Kanika Dutta in Business Standard points out, “Despite all its deficiencies, India has not only become the world’s back office, it is increasingly being eyed for its manufacturing capabilities as well. If Indian management has anything to be proud of, it is the ability to succeed and achieve global standards in what are still undoubtedly and unabashedly Third World conditions.”

Almost every one agrees that a high growth in manufacturing is necessary to generate greater employment opportunities. As every agency had done recently, CII points out to “constraints in five areas such as infrastructure, labour laws, cost and access to credit, technology and skill development need to be addressed.”

CII suggested setting up of Technology Upgrade Funds Schemes for all manufacturing sectors and making provision of a weighted deduction of 150 per cent for all in-house research and development expenditure and R&D commissioned by private firms to academic institutions and public sector laboratories. CII’s other demands are:
  Restoration of 100 per cent rate of depreciation for energy saving devices, pollution control equipment, alternative energy producing devices, computers and devices for water conservation.
  Total dismantling of the inspector raj
  Permission for contract labour to be allowed in non-core sectors
  Making the IDS Act applicable to only units with more than 1000 workers
  Complete de-licensing and decontrol of all segments of the education sector, establishment of multiple private sector accreditation agencies and fiscal incentives for corporate investments in skill formation and education

Unfortunately, CII does not come out what they plan to do themselves, particularly for their shop floor employees, their training, their compensations, and improvements of their quality of life. In many SMEs the compensation to the workforce is dismal, when the labour cost in India might be very low. CII must not overlook its social responsibility for improving the working conditions of workforce in unorganized sectors. Manufacturers must not neglect these aspects. Its member companies must not keep on talking about labour reforms without having an effective grievance handling system in place.

And then many times I start wondering if we are serious to do something in manufacturing that can amaze the world as Chinese do. Why can’t India be the top auto components suppliers in world? Why can’t with the best ores and the history as amazing as Iron Pillar, India become the largest producers of steel or aluminium, or for that matter the largest exporters of precision castings and forgings? What holds India from becoming the largest exporter of engineering goods? And of all the things why can’t India match China in exports of textiles, when India has the history of its excellence in textile trade since Harrappa era?

India planners must select some areas of strength and try to reach the top position in manufacturing and producing them.

The number of domestic airtravellers will touch 24 million by March 2006, growing 30% and international air travelers will touch 20 million, growing at 18% annually, as per data from the ministry of civil aviation.

In the eight months between April and November 2005, an estimated 19 million mobile subscribers were added to the networks. For the last one year, the average run rate of new subscriber additions is at 2.5 million. With Motorola, Siemens, and Nokia promising to drive down costs to under Rs 1000, and reliance bringing down STD charges all over India at Re 1 per minute, the additions will be faster.

Thera are today 16 million credit cardholders and 30 million debit cardholders in India. In 2006, an estimated 450 malls are likely to be added in the top six cities, and the retail market has been valued at 4330 billion for 2005, growing at 10% for the last five years. And as per the estimate, the new malls to multiplexes ratio is about 2:1.

Office space demand in 2006 will be about 22 million square feet in India’s top nine cities as compared to 15 million sq. ft. in 2005. Over a million cars will be sold in 2004-05.

Total Internet connections stood at 38.5 millions as of November 2005 and is expected to reach 100 million in two years. Between 2000 and 2005, the number of Internet users has grown eight times from 5 millions to almost 40 millions, mobile phones by nineteen times from 2.3 millions to 45 millions, personal credit offtakes from$10 billions to over $ 30 billions, and cyber cafes grew six times from 18,000 in 2000 to 105,350 in 2005. Broadband connections took off in 2005 with a 7.5lakh score between April and November.

Investor wealth grew by nearly 50% from Rs 16.8 lakh crore to Rs 24.6 lakh crore during 2005. By the end of 2006, it is estimated that there will be one million dollar millionaires in India. Studies show it’s the lesser-known cities where the millionaires are now concentrated. According a National Council of Applied Economic Research study, millionaire households or households with an annual income of over Rs 10 lakh have been growing at a whopping 850% in Nagpur. Between 1996 and 2002, the citty saw their numbers rise from 1,199 to as many as 10,417. Ahmedabad is at number two position.

Are these figures not confirming the India shining? All of you can help me in making the list could much longer by adding some more data. But then are we happier too, as many ask me when I put forward these figures? I do’have any answer that satisfies me, before I put forward to my friends.

As it appears on thee first day of 2006, the whole of Delhi came out to celebrate. And Delhi had latest gift from Metro of its third line to Dwarka. Metro provided the fun ride for Delhiites.

And Mrs. YP Singh, wife of advocate friend and a typical grandmother had to return back without getting into ‘Akshardham’- the newly built architectural marvel of Delhi. India is on move. We also had an instantaneously planned outing yesterday along with Aroras. I wanted to just be out and so drove towards Greater Noida- the first ISO certified township of UP. We took some eatables and wanted to have some sort of picnic in a garden. While we were about to return, as we were not getting one suitable place Arora could help us finding City Park. It was a nice place and well done to UP standard with children corners, and flowerbeds with decently done landscapes.

Unfortunately, the toilets are leaky and dirty too. I don’t why this aspect is totally neglected in this country. I had a similar feeling when we visited the wonderful facility of Akshardham. Perhaps, the one solution that I can think of is to lease the facility to some reputed private company. The entrance ticket can be a little more to keep the park in best of its shape and cleanliness. Further, the authority may integrate a small tidy food plaza too to make it more enjoyable. These facilities will be increasingly popular with the expanding middle class base of the country.

And the drive while returning on the Noida Expressway with greenery of cultivated fields on both sides was exciting. Here you can see the coexistence of modern huge structures under constructions and the rural surrounding. I wish the authorities could develop some rural resorts for city dwellers for a day off in natural surroundings.

Perhaps it is the first time in history of the world that any country is having so qualified persons responsible to run a country. The present younger generations can’t think of a better team at the helm of the nation’s affairs. The President of the country is world class technocrat. The Prime Minister is world class respected economists. The Finance Minister is Harvard educated legal luminary. The Chairman of Planning commission is again a highly reputed and experienced economist. Can one think of a better team? But will the team produce the result expected by the billion strong people of India? Though I wish that they do, the results of the first six months in office is not very encouraging at least in the field. It is not only what I think. Many assess their performance as an average. This Sunday in Times of India, Shri Swaminathan Anklesaria Aiyar wrote in his column with a caption-‘six months of timid waffle’-

“Lots of words and little concrete action. His one clear strategy seems to be a single-minded focus on surviving for a full five-year term, and if this means waffle and timidity, so be it. …. His main strategy can be summed up as: do not displease Madam, and do not displease the Left. Do not test the limits of your power, just concentrate on survival. This is not what I had expected. …. Manmohan Singh has frequently talked of the need to improve governance, to reform the dysfunctional administration, police system and judicial system. Yet we see no sign of action, only suggestions to set up a new committee on administrative reforms. This is waffle. Umpteen committees have given umpteen recommendations on reforming the administrative and judicial system. We need action, not more committees.”

Dr. Singh as well as Mr. Chidamabaram had been talking about many things providing a lot of hopes in near future, but I think they must concentrate on some specific projects so that all common people including me start getting a feel of some activities speeding up all around. When I talked with the truck drivers about the progress of GQ (Golden Quadrilateral) Super expressway, they don’t report any significant progress between Agra and Kolkata. Every time I talk to my village home in Bihar and enquire about the possibility of electrification of my village that falls under the constituency of Meira kumar- the celebrated daughter of Babu Jagjivan Ram, the reply is hardly encouraging. Why can’t we move faster on roads and electricity? Is it because we don’t have fund or we don’t have the will to get going faster? Can the PMO or Finance Minister, if not PM himself come out with a system to measure the government performance for the last six months? Why can’t it be some 10 major items, say the Km of road constructed, the number of villages connected by roads and electrification completed, number of employment provided by private and public enterprises, or in social sector, telecom targets related to internet, number of water bodies renovated, KM of irrigation canals built, number of healthcare centres created, etc. Instead of having a vague and very general common minimum programme, why can’t they give to nation specific targets of performance? Why can’t they change their criteria of performance from money sanctioned or money spent to work or project completed?

It will be worthwhile to talk of some prestigious projects and complete them in a time frame rather than going on promising many moons. Dr. Singh promised to develop Mumbai to become Shanghai. And is there a follow up after that announcement? And now Sheila Dixit talks of taking Delhi to Hong Kong or Kwalumpur level. Can they get the roads to the standard of those cities in next 4 years? Can they get the transport system to that standard? Can they provide the civil amenities- drinkable water and electricity to that standard?

With the great team at the helm of affairs India and Indians want a difference in governance and a visible change and speedy activities all around. Can we see it happening in years left of their governance?

Agriculture cannot grow at more than 2-3%. For India to cross 8% GDP growth rate, if manufacturing grows at 6%, services will have to grow at 12% that will be quite difficult. Services may be India’s strength, but it has grown in double digits only once in the last 10 years. However, if manufacturing grows at 8%, services will need to grow at 10%.

India must push the growth rate of manufacturing to double digits for GDP to grow at over 8%. Manufacturing will have to outpace services for the overall GDP rate to sustain at above 8% for the next decade or two. India cannot afford the share of manufacturing to fall further. Ideally it should increase. It is essential to bring India in league of developed nations.

Workforce Engagement in Agriculture is static and will reduce

In 2002, agriculture employed 191 million out of 343 million employed people, or 56% of the total employment. This figure-191 million in agriculture has remained static since 1994 and as per government projections, and will remain the same in 2007, 51% of the total employment of 373 million. The agriculture can’t sustain even the present engagement level. The tractors and other mechanical equipment will be essential to improve productivity. That will mean further reduction in employment in agriculture sector.

The government expects and targets 40 million job creations during the 10th Plan. The government expects the services sector to provide 82%, while manufacturing will account for a mere 18%. Is it not a too much of dependence on the service sector?

The government policy and manufacturing

Strangely, the government had no special hopes from the manufacturing sector and so it didn’t have any plan for the manufacturing sector..

The government apathy is the main reason that India has failed to become a global player in the manufacturing area. India failed to attract significant FDI in manufacturing, whereas countries like Thailand and then China moved ahead. The story of the two protected passenger car manufacturers is known to all. The first wave of the entry of Japanese automobile manufacturers- Mitshubishi, Mazda, Toyota- could not move ahead significantly and failed. Suzuki came and survived because of emotional reasons.
Global multinationals, but for few South Koreans haven’t considered India in a big way as a potential destination for establish to set up large scale manufacture facilities and export goods.

However, it is still not late. And now India has proved its capability in manufacturing sector to certain extent. MNCs have realized the pitfalls of putting all their eggs into the China basket. India seems to be emerging as a second manufacturing source. Some of MNCs are planning to make India a global source base for some products that have also a good domestic market. Hyundai Motors and then Suzuki Motors have that strategy. Toyota Motors is also moving with that strategy with setting up of a transmission manufacturing plant in India.

A new mindset and confidence in Indian entrepreneurs is apparent. Indian companies in sectors from pharma to auto ancillaries, to chemicals and textiles- are looking at exports as an integral part of their future strategy. Exposure to global opportunity, MNCs interest in moving to low cost locations, the examples presented by IT and ITeS sector, Chinese manufacturing success stories, government’s helping hand through certain concessions for export- all are behind the change of the mindset.

iT IS HAPPENING NOW