The prime minister today called for a sense of urgency with ‘make in India’. Speaking at the inaugural function of the second plant of Maruti Suzuki in Gujarat, he said that we should court investments of all sorts, and from everywhere but employ our people and sell everywhere.
The call repeated again after a decade of the flagship program is an acknowledgment of the monumental failure that it has been. At around 12% of the GDP, manufacturing as a now has the lowest share in 4 decades.
This is when the GDP itself has hardly doubled in the last decade, whereas it had tripled in the decade before. This is perhaps the biggest slump manufacturing has seen after independence.
Over the last decade we have seen that most of the big ticket manufacturing projects have been shifting to Gujarat, even the semiconductor unit was shifted there. This makes the regional divide even more pronounced.
Yet, what was striking, today’s speech is his absolute climb down on any pretense of ethics and transparency. He said he didn’t care if the money was white or black, as long as it was invested in India. Suddenly the entire specter of demonetization plays before us.
Was it to this end that hundreds died in queues before ATMs and millions of informal enterprises were wiped out. Was it to this effect, that GST was rolled out. The narrative of Swiss banks and tax havens, has long been abandoned. Newspapers today reported 43 billion rupees donated to unknown political parties in Gujarat. More than the entire opposition put together.
Ethics aside, where are we going to sell, the made in India products. With 50% tariffs, the biggest market is virtually closed for us, and others wouldn’t extend us any preference either. The extreme inequality that we are witnessing, worse than colonial era, means we don’t have buyers in the country as well.
Foreign capital would use not only our sweat, but also our natural resources. The developed world would prefer to shift its polluting industries, but are we in a position to accept them. With investments, technology and markets all being foreign, we may be reduced to a sweat shop. We have but crossed that stage.
With the AI disruption looming large, manufacturing is poised for a paradigm shift, we need to prepare for it, instead. In a world of fiat money, investment is not the bottleneck, technology is. Courting money, is futile, we need to court and create technology.
For that we must overcome our narrow and parochial political system. Where knowledge is respected, irrespective of position and identity.
