Mr. Narendra Modi’s maiden I-day extempore speech was indeed a call to restore optimism among the citizens, with good and noble intentions. Mr. Modi is known to deliver good speeches as was evident during his election campaign. This time he took it to new heights by delivering an hour long no paper address, following the trend set by Mr. Barrack Obama of delivering speeches extempore style. He hit the right note by focusing on Financial Inclusion for the poor, by facilitating bank accounts under the Pradan Mantri Jan Dhan Yojana, providing free debit cards and insurance cover of Rs.1 lakh. His call to the global industrialists to ‘Make in India’ and revive growth in the manufacturing sector is laudable and fair enough. However, what remains to be seen is how this could be implemented. For foreigners to come and invest in our manufacturing setup will require that our infrastructure and business atmosphere is right. In simple terms our cost of production should be low enough to achieve economies of scale and thereby, make the prices internationally competitive. Mr. Modi and the Government have done well to improve the business atmosphere. With the Sensex and Nifty reaching new highs every other day, there seems to be resilience in the stock indices. The Industrial Production Index and the Consumer Price Index too are in revival stage.
But what remains to be seen is development in infrastructure, which is substantially hampering the production costs. It includes the speed and ease in transporting goods to the ports or to the consumers. Do we have the transport facilities to match the speed of response required to be internationally competitive? Do we have the modern port facilities like in China or Japan to help industries send them with speed, without damages and to all ports around the world? Our freight handling is pathetically slow and inefficient, with age old equipments to handle the load. Our roads as we all know are in terrible conditions, where mere pedestrian movement from one area to another itself is cumbersome, so forget goods movement. Truck transport has become synonymous with delays and not to forget damages. With infrastructure being the structural issue in our economy, it might be unlikely that FDI would continue in the long run. May be the FIIs and the FDIs are just reigning on the Modi wave. Mr. Modi has certainly sold and reinstated the long standing ‘Made in India’ dream but what remains to be seen is a roadmap from the Government to deliver this dream.
This Article is written by Vishak (PGDM 2013-15)