Prime Minister Narendra Modi exhorting foreign firms to come and ?make in India?, at his maiden Independence Day speech, sounded like hyperbole, but the good news is the manner in which it is being followed up. A follow up event is planned at the capital?s Vigyan Bhavan on Thursday, and the event is slated to be attended by about a thousand global and Indian business leaders?the idea is to showcase India as a global manufacturing hub in at least 25 of its priority sectors including pharma and auto components. The campaign will be followed up in the states and also embassies abroad where India will be projected as a favourable manufacturing destination.
How convincing this will be in the face of India?s falling competitiveness?from 60th to 71st out of 148 countries in the WEF?s ranking and from 131 to 134 in the World Bank?s ranking in just the last year?remains to be seen. Moreover, with tax levels in India significantly higher than those in Southeast Asia, this is a natural disadvantage; add to this the difficulty in procuring land even before the LARR was put in place, the lower labour productivity, the poor availability of electricity, among others. Putting e-governance solutions, and 48-72 hour timelines for queries to be answered?as is planned right now?is all very well, but in the long run, investors are looking for solutions to the far more difficult questions. It doesn?t help that many of the solutions like those on land, labour and power all lie in the domain of the state governments.
