The e-biz initiative of the Cabinet Secretary hopes to help companies get over some 60 clearances on line; but this is likely to take time before a single platform to take care of all the needs are covered
Speaking for the first time from the Red Fort ramparts on this Independence Day, Prime Minister Narendra Modi made an impressive extempore speech and invited foreign investors to "make" (or rather manufacture) what they need and export it to where they please from India. He invited foreign investors to make India their industrial hub.
He threw caution to the winds and spoke fearlessly, unshielded by bullet proof glass or vest. He was humble enough to call himself as the "pradhan sevak" and said that India has the raw materials needed, qualified and technically skilled personnel, competitive and low wages, and the keen desire to make products that the manufacturer could sell, where they are needed. From the Red Fort, he offered red carpet treatment to investors to make India their industrial base.
The question before us is whether India has the wherewithal to meet the exacting needs of the foreign investors? Can they comply with hundreds of formalities and obtain approvals from various departments, and authorities before they can even think of going to the drawing board to prepare the blue prints for a manufacturing programme?
According to an assessment made by the Project Monitoring Group in the Cabinet Secretariat, they found some 24 approvals are needed from the Central Government and another 35 clearances from various State departments concerned. A formidable task indeed. They found that out of these only two can be obtained through one platform and apparently there is a lack of coordination and cooperation between state departments and the central government itself! Efforts are now being made to have the platform e-biz set up to comprehensively cover these issues. At least a good move to reduce tension for the new applicant!
This e-biz initiative of the Cabinet Secretary hopes to help companies get over some 60 clearances on line; but this is likely to take time before a single platform to take care of all the needs are covered.
Among the many areas that have caused inordinate delay is the time involved in getting "green clearances". According to information available in the press, hundreds of projects in the country are stuck due to this issue. The reports indicate that 425 projects are awaiting environmental clearances out of which 160-170 are set to be for industrial projects! This needs to be removed to the maximum extent possible.
The next important issue is the availability of land. According to experts, the cost of land accounts for 20% to 25% of the project cost and would certainly vary from one location to another. In order to overcome this, should the government decide, with the cooperation of the State concerned, to make it available in the interior, free or even at cheap prices, which would be away from towns and cities, there would be the imperative need for development of infrastructure facilities. Extension of existing power lines, rail-road connections, setting up of small townships so that the employees may live close by are other factors that need to be covered.
PM Modi mentioned about skilled personnel being available in the country; this is basically true but a majority of them are employed. Others will have to be trained to meet the needs of the factory. Even otherwise, the fact is almost 60% of the population are involved in agriculture, one way or another, and there is also a growing tendency for farmer's children to leave for cities and towns to take up "jobs" rather than "farming"! This attitude is already affecting farming particularly during harvest seasons.
The SEZs are a boon to the exporters. However, Dr Nirmala Sitharaman, our Commerce Minister, is reported to have said: "within the country, people are saying why exporters should only get this fantastic facility?"
Modi's invitation to foreign investors make the writer wonder if the Prime Minister has some special scheme in mind, such as setting up FEZs - Foreign Exporters Zones - where they could come and establish manufacturing units exclusively for exporting their finished products out of India? If such goods manufactured in FEZs are required for use in India itself, they could be "exported" by the manufacturer! For this purpose, they would have to "import" raw materials and manpower services from India! This will be a special privilege that can be established so that foreigners come and invest in the country, and make India their industrial hub! Maybe they can be given some tax benefits which are more attractive then their own country of origin?
Food for thought? Such ideas can be worked out in detail to the benefit of the country!
has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)