To enable Government to change its approach towards the private sector, industrialists and entrepreneurs have to recognize the political realities of India, and the economic and social environment that creates these political compulsions. The private sector has to win the trust and confidence of their employees and the people at large by visibly demonstrating their commitment to grow their industries, and enable them to compete at a global level. People must believe that the industries are being managed to achieve this national purpose, and not for the benefit of the entrepreneur and his or her family. Their life style, salaries and payments from the Company should be appropriate to the Indian social environment. Company operations must be fully transparent and there should be no suspicion of tax evasion and black money generation. If the private sector, and especially the industry leaders, move in this direction, Government will find it easier to support and promote the growth of private enterprises, and to take measures to enhance their competitiveness.
Private industry and entrepreneurs need to think about the consequences of the nation not being able to grow manufacturing fast enough to create jobs for the unemployed youth. There is little doubt that they will stand to lose heavily in such a scenario. Hence, it is in their own interest to do everything possible to make manufacturing globally competitive. Government actions will not be adequate to attain this objective. Top managers have to review their responsibilities. They must create conditions where workers and managers become motivated to contribute to the continuous improvement of all areas of their company. The human resource contribution to achieving competitiveness, and sustaining it over time, is far higher than that of any other factor of production. The Japanese have demonstrated this fact beyond argument. Maruti has shown that with the right framework of policies and top management practices, quality and productivity equal to the best in the world, can be achieved. In the Indian political and social environment, motivating the human being is the most suitable way of creating conditions for the rapid growth of a highly competitive Indian industry. The lead for this has to come from the leaders of private industry.
Along with human resource motivation, perhaps the other vital area of attention by private industry is to pro-actively get involved in upgrading their supply chain, so that their vendors are also of international quality and cost. In most manufacturing industries the producers of the final products buy fairly high percentages of components and materials from vendors. Unless these vendors are also motivated and encouraged to become globally competitive, the required results will not be forthcoming. Vendors and their OEMs have to work together to achieve this objective. OEMs should help their suppliers to develop the ability to keep improving technology, using the best machines, tools and fixtures, and employing educated and trained manpower. Vendors who are small and medium scale industries require special attention, because experience shows that the incentives to remain in these categories prevents them from making the required investments to achieve consistent quality, and produce high volumes. Globally relevant companies cannot develop without the suppliers overcoming this handicap. In Japan, the small scale industries have developed many technologies that enable Japan to lead manufacturing competitiveness. India and Japan have very different definitions of what a small scale industry is.
In the vitally important area of manufacturing, India has to find ways of quickly doing what should have been done decades ago. It is a national task of the highest importance. All political parties should unite in implementing the required changes in laws, policies and regulations that are impediments to attaining competitiveness in manufacturing. The Indian voter wants jobs for the youth, and will welcome actions taken for accelerating manufacturing for this purpose.
R C Bhargava, Chairman, Maruti Suzuki India writes this piece for FICCI publication “Economy of Jobs”.