Make in India is
the flavour of the season, almost - with Media going overboard on its
prospects, and waxing eloquent on the benefits it holds for India. Lost in all
this panjandrum are the voices - some small, like mine, and others highly
influential, who have been raising questions {not objections} on this entire
affair. Let us look at some hard facts, conclusive facts that can drill a
hole through this initiative, or at least raise some serious questions.
1) India is a primarily agricultural economy
with employment in agriculture being at around 57%
2) The total number of dependants on
agriculture can easily be around 500-700 Million people, perhaps more
3) Data supports the above : let us look at
just one data point - number of land holding in agriculture. There are 121
Million individual land holdings in India. If you assume one family per
holding, you are straightaway staring at a figure of around 500 Million. Add
landless labour and support services, and you have a humongous number.
4) Another proof can be had by taking a look
at Census Data; more than 75% of the population stays in Rural India. The
population of the top 200 Urban agglomerations do not exceed 20%. It was 15.4%
as pre census 2011, and 14.4% if you take out the agglomerations and list only
the cities. That is the reality.
5) The Indian Economic structure is not a
large-company structure; Corporate India - towards whom this plan is pointed -
contributes less than 20% {I think it is less than 19% even} of national
income. Ditto on any other parameter you may care to check up on.
6) Another proof is the data on employment,
which also shows a skewness towards unincorporated and unregistered
employments, as also data on Rural-Urban split of employment
7) Consumption data is another interesting
data point, with the consumption of the bottom layers of economy having grown
by around 1% since 1978, and by 3% in the top layers of the economy, thereby
proving that increased economic activity does not lead to riches for all. We do
not have consumption trends of consumables, unfortunately - so we have no way
of knowing the relative speads of this increased consumption
India isnt just about Corporate India, which
is a rather insignificant contributor to any economic number you may care to
anaylse; and there is a strong possibility that Make In India might not
directly benefit the people who need change the most - the rural population,
whose needs and challenges are not the same as those of Urban India; the same
can be said of the economically deprived segments of our society.
In order that the potential of the bottom 80%
of the population is unlocked, and the impact of growth is felt across all
sectors and income-levels in a more equitable distribution, some basic steps
are vital. In fact, it may even be possible that the absence of these steps
might actually stall the entire MII initiative, and ground it fully and
finally. I havent seen any indication from the GoI that it intends to do these;
if it is in the works, excellent. If not, we are still hurtling form one crisis
to the next.
1) Agriculture ; Data again clearly show that
nearly 93 Million of the 121 Million holdings are losing money on every crop
{NSS - 2005; am not aware of any survey conducted after this}. This indicates
that earning for the farming community have to improve; which means that the
entire ecosystem needs looking at : viz subsidy structure and outlay, inputs,
market access, price controls, APMC, price realisation at farm level, education
of farmers in latest techniques, spread of knowledge from ICAR and other
research places to farmers, etc. Not one point from these is being talked
about.
2) Unless the farmers and those dependent on
agriculture earn real money, there is zero chance that they will educate their
children beyond the basics - and even that is doubtful. Literacy does not mean
education - and economic growth requires education, not literacy
3) Rampant Health Problems in rural India;
economic growth means health is a prerequisite. And we as an economy spend
among lowest on health worldwide. Fact.
4) Education{1} - IITs and IIMs are not
required, where the focus currently lies - and quite a few of these people run
away from India, and that leaves out scores of colleges that require
upgradation. Why should we focus on building capabilities that enable those who
dont want to call India their home encash and leave, forgetting their mother?
Not all leave, I admit - but then again, we do not require more IITs and IIMs
for internal candidates - it is far better to upgrade existing infrastructure
that will benefit not the select few but the large majority! That is the need
of the hour!
5) Education{2} - For the mid and lower level
colleges to perform better - another input is the quality of incoming students;
improving their education levels requires investment in primary and secondary
education. This isnt happening - GoI is not spending on these
6) Education{3} - Participative growth
requires education that enables people to take advantage of the opportunities.
This will not happen under the current MII plan, that is a foregone
conclusion
7) Education{4} - Education is a state
subject, or a subject in the concurrent list, What initiatives are being taken
by the states? What pressure is there on them to improve, to ensure proper
education and implementation?
Ditto Agriculture - with focus being on
freebies and irrelevant matters like GM Crops which will have no impact
whatsoever. Ditto health. It is one thing to give them money - which is
excellent; quite another to ensure its proper utilisation. RBI report on states
budgetary health 2013-14 categorically lists the improvements as well as
shortcomings of the states of India, as I stated in an earlier article. Please
google and read.
It is indeed a laudable objective that GoI
has undertaken - MII; but the question remains, is the timing right? Can it be
postponed will we have the right infrastructure and mechanisms in place? Of
course it can; these years can be far better utilised in building
strength and capabilities across the board rather than undertake a
high-risk venture like MII.
An initiative like MII requires a few basics
to be in place for it to be successful and implemented smoothly without
which, delays are inevitable, as also massive cost overruns as businesses find
a lack of requisite resources playing spoilsport. Some, like a digital
backbone, can be implemented side-by-side {see data at the end}; others cannot.
These others are matters related to people parameters like health and
education.
1) Factories require workers, Where will you
get them? If you get them only from Urban or Semi Urban India, the time taken
for the percolation to reach rural India will ignite resistance as the perceived gap between Rural and Urban India
increases. The objective is to make all India a wealthy nation - not just Urban
India. Does rural India have the ability as of now? I do not think so. As I
stated above, there is a massive difference between literacy and education. We
need education, not literacy.
2) They require Land. Where will you get
land? Create draconian laws that ignore the interests of farmers? You do that -
and you are guaranteed failure. We are a democracy, and have an excellent
judicial system. The only result of ignoring the land-owners interests will be
court proceedings, resulting in stalling of the entire MII initiative fully and
finally. Irrefutable historical evidence exists of this. There is no option but
what the UPA did- approval of 70% {pecentage negotiable as per me; point is
community interests need taking care of} of the community who stand to
lose.
Urban India has no conceptualisation of Rural
India; MII only stands to benefit the Urban population, not the interiors. And
the result of a skewed growth will be another crisis as Urban India will not
find the resources to fuel their growth as they go into hinterland, leading to
a massive crisis of gargantuan proportions, given Corporate India's idiotic
penchant of investing without proper analysis and on half-hearted reports
created by people living in secluded AC environs of Metros, from excel sheets
and data inputs which are highly suspect for their content and accuracy.
That leads me to the most vital set of reforms
- proper data collection, and statistical analyses; and digitisation of
everything - which includes digitisation of land records, economic activity,
data collection authentication and analysis, everything. Please remember that
Millions of our enterprises are unregistered, and Millions more do not reveal
the full story. For a proper reasoned analysis - data is vital; and unless
captured properly and completely, surprises will arise that will cause hiccups,
delays and wrong turns.
There will be tax and legal repercussions
that will need to be thought through - which is relatively simple; It will also
require taking various vested interests on board, which is exceptionally hard,
and the only real challenge; vested interests who will see no benefit in lieu
of losses in various ways - not without the concurrent reforms in the comments
above. The result? More delays.
On the dream of digital India etc, please
take a look at the reality in a national perspective. Coverage alone will
suffice, we need not go into the aspect of quality of coverage, which is a
subject unto itself. Data Points in the coverage do not support the contention
of most people that India is a digital nation. And data is sufficiently important a factor for it to merit an independent analysis, given that we are in the information age. The reality is starkly exposed
by data :
Average Data Usage Per Customer Per Month on
GSM : 62.16 MB; CDMA : 192.99; Avg Tot : 70.10
Broadband : 68 Million; Narrowband : 190
Million subscribers approximately
Other reports : http://telecomtalk.info/mobile-data-growth-indian-telecom-operators-and-customers/120732/
Data Arpu, while it is growing, is still in
the doldrums; the average Indian consumer consumes less than 500MB as per this
news article - a figure that is corroborated by the TRAI report.
The figures above are again borne out in this
report : http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/PR-TSD-80-05122014.pdf,
which clearly states on page 12 that the number
of user in India on 31st October accessing speeds of greater than 512kbps is
75.73 Million, including 60.61 Million from mobile devices.
We are a nation of 1.27 Billion! Penetration
is abysmal; can we afford to wait till penetration rises? Will it rise in the
absence of other reforms - or will it hit a glass ceiling? The data clearly
states that only a small insignificant segment of our population stands to
benefit from the data revolution as
of now; things are changing
fast - but this is where it stands today. This goes hand-in-hand with income -
for the people in the bottom income levels to gain, they should be educated,
and earning enough to have access to the services.
We do not, as per me, have the proper
ecosystem to sustain such an initiative; at least not one that can ensure fast
devolution of benefits to the lower income segments. We run the risk of
increasing the income differential. Furthermore, MII requires an ecosystem
conducive to it, not rhetoric.Is it rhetoric? Or is it real? We dont have
enough data to make a definitive conclusion of that as yet. But the indicators
are worrisome. Let us see.
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