March 30th, more than a month later, I am still hopeful to hear a plan from Indian leadership that finds opportunity in crisis of our generation. An opportunity that sets the direction for the future of India, progressive India, Advantage India, to showcase the confidence that India can stand tall for the world to provide & accelerate sourcing alternatives to China.
It is no brainer to understand the growing concern around the world for not having a viable sourcing alternative to China. Coronavirus COVID-19 made it quite visible on how dangerous it is to have a total dependence on a single country to source all its critical products, components and cheaper day-day goods. It is no wonder, world suffocated to find a protective gear as basic as a Mask for weeks during COVID-19 outbreak.
world suffocated to find a protective gear as basic as a Mask
India too had its extreme dependence on auto, electric, and electronic components, raw materials for bulk drug industries. Imagine importing basic mobile phones, CCTV equipment, valves, cast iron products. Interestingly Indian alloys, metals referenced in Vedas, not sure why India depend on any other country ? when the quality iron ore is being exported to China, labor looking for employment in India, mass land holdings unused for productive use in India.
It is interesting to see how a most populous country in the world with a population of 1.3 Billion listened to its leader to lockdown for more than six plus weeks (as on May 04th) for a self-quarantine to control the spread of COVID-19.
When fear drives, Change is Natural
It is this time, I feel the greatest opportunity for Hon’ble PM Mr. Modi to draw attention from the nation to lay out a plan to promote local manufacturing and orient its people the real need for such. While no such plans published anywhere as on today, I like to highlight an 8-point action plan to take control of the situation and re-orient the Indian society towards an Advantage India.
- Announce a 5L Crore Stimulus in the lines of Payroll Protection Program (PPP) in USA to help MSMEs, Startups that has the business during 6 months prior to COVID-19 outbreak. It is important to make sure that the money allocated will go to these entities who paid their GST, shown the business to give them the necessary confidence to stand tall.
Remember MSMEs provide largest employment (organised & unorganised) in India and enable true functioning of the country.
- Reduce the GST rates on most common products for 2 consecutive Quarters post-lockdown to revive the economy.
- Reduce Labor costs in the country by enabling labor reforms on a war footing basis. Discourage freebees given by the States without considering the fiscal discipline and those who go beyond the lines of FRBM.
While this may take time, leadership must consider this on priority to have a greater opportunity in hand. Remember, what India can offer in the space of product manufacturing is its size, scale, and resources with a consideration towards local consumption.
- Define 4 targeted manufacturing clusters across India to focus on non-technological imports to trigger, initial boost in manufacturing cycles and the scale.
- Promote Component manufacturing in defense, automotive, electrical and curb imports in this area for Indian manufacturers to build the ecosystem slowly steadily.
- Invite global manufactures who look for sourcing alternatives to China in the areas of national interest and promote exports.
- COVID-19 gave most world economies an opportunity to reset the expectations. Local demands are growing to curb dependency and reversing the trends of globalisation and heading towards “GloCalisation“. It is a great environment for Indian leadership to work with the G-7 and beyond to leverage international relationships for India to be more integrated and progressive.
- At 2020, India still has the extreme edge with the demographic dividend, and being most populous, democratic, matured marketplace. It is time the Indian leadership to take a firm, visible, viable alternative to China on international stage as a provider.
The anticipated advantage is a much needed and timely when losing the sheer from services sector that India enjoyed for more than two decades, growing unemployment .. isn’t it best opportunity to have more holistic approach for India’s inclusive growth and to be a true global producer that once was in the history ?
CEO @ EZTax.in
The opinions expressed in this article are those of the author. They do not reflect the opinions or views of the EZTax.in.
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