A
time for change
SN
Chary deconstructs the surprising results of the 2004 Lok Sabha elections
and finds in them a number of hidden opportunities for the manufacturing
industry
The
parliamentary elections are over and a new government, with the outside
support of the Left, has taken over. According to several political
analysts, people have given a verdict for ‘grassroot’ improvements
– improvements of the rural and agricultural sectors as against
the perceived emphasis on urban development by the previous Government.
How do the changed circumstances affect the manufacturing business?
What should the manufacturing and engineering industries be prepared
for in the near and foreseeable future? No doubt, these are the questions
plaguing senior executives of companies predominantly engaged in the
manufacturing business. This sense of uncertainty appears to be partly
responsible for the choppy stock markets of late.
The clichéd answer to these questions would be, “The Government
will not turn its back on reforms. After all it was Dr Manmohan Singh
who introduced economic reforms in the earlier license-raj ridden country
way back in 1991.” Indeed, the industry can repose faith in the
economic leadership of Dr Singh and his team. However, that is not the
only reason for optimism. The change in economic policies expected to
be brought in by the new Central Government, even if centred around
the urbanpoor and the rural sector, can mean a plethora of opportunities
for the manufacturing industry.
AGRI-DRIVEN MANUFACTURING
The hype surrounding the post-industrial society leads one to believe
that a society’s progress takes place via a single route only.
Agricultural growth leads to a growth in manufacturing. This results
in a growth in informationcum- communications, which in turn. leads
to a growth in services. However, though these growth areas are all
simultaneously essential, the emphasis may vary as per the needs and
available resources of a country at a point in time. There is no such
‘journey’ where one leaves a station behind and moves towards
the next station.
The surprising election results have only served to reiterate that progress
has to be an all-round exercise encompassing all sections of society
and all sectors of the economy in a balanced manner. And this is good
news for India’s manufacturing sector.
With greater investment flowing into the agricultural sector, the demand
for a number of engineered products used in agriculture will increase
manifold. The kind of inputs provided by the manufacturing industry
to the agricultural sector include fertilisers, pesticides, farm implements,
farm machinery, fluid handling devices like pumps, pipes, channels,
tanks, power producing equipment such as generating sets and batteries
– conventional and solar. Agriculture also requires facilities
for efficient storage of agricultural products which creates a demand
for construction equipment, and later, refrigeration and ventilation
equipment. Providing convenient means of transport to the people in
the agrarian sector to transport their produce is another necessity,
thus creating a market for the transportation equipment manufacturing
industry.
Also, as the Government strives to make the agricultural sector world
class, the manufacturing industry would be required to play a role in
increasing the agricultural sector’s productivities. There are
several lessons to be learnt from Amul – the way the technology
of collecting, chilling, preserving, transporting and processing raw
milk was used for the larger benefit of the rural masses in India.
There is no reason why entrepreneurs in the manufacturing industry cannot
produce similar results in several untouched areas in our agricultural
economy.
Agriculture need not restrict itself to the production of food items
and it could include several horticultural and non-agricultural items.
The technology for improving productivities in these areas can come
from the manufacturing industry – like the technology for producing
tulips in water used in The Netherlands. Manufacturing and IT could
serve as the inducers of technological improvements in agriculture /
horticultural / agro-processing sectors.
EMPLOYMENT GENERATION CAPABILITY
One of the crucial problems to be addressed by the new Untied Progressive
Alliance (UPA) Government would be that of burgeoning unemployment.
In the last five years, the IT sector and IT related services sector
boomed. However, this only generated employment for IT-savvy, university-educated
and professionally qualified young people from the cities. Financial
services, too, boomed; again the section of society to benefit from
it was the urban educated class.
While the Government cannot afford to reverse the growth of the IT and
related industries / businesses, greater emphasis is likely to be given
to promoting those industries, which will generate employment for the
rural and the urban poor population.
This modified emphasis would mean an opportunity for expansion of the
manufacturing industry. It is the manufacturing industry that has the
capacity to provide jobs to the economically weaker, less formally qualified
and rural people. Strengthening the weaker base of our human resources
is the primary concern of the Government. And due to its very structure,
the manufacturing industry is better poised for providing this service
to the people of this country.
.........CONTD
