Reforming India

We are busy in celebrating ‘Make in India’ week. Though it began on a bad note with a massive fire, it is, nevertheless, expected that the event would finally achieve its objective of attracting huge foreign investments. Yet, it is the government’s foremost responsibility to ensure the easy availability of credit to help startups take off without hindrance. Only then can manufacturing growth pick up.
Meanwhile, we are approaching to the announcement of the Union budget. It is necessary for the government to also push through the long-awaited goods and services tax (GST) in the forthcomings session, trigger the revival of investments in the infrastructure sector and improve the ease of doing business quotient, besides initiating land and labour reforms for Make in India to succeed. However, given the current political climate, GST is unlikely to materialise anytime soon. So, the government must immediately shift focus to address land and labour issues, which are in the state list. ‘Make in India’ cannot be dictated from Delhi; most of the action must happen at the state level. Competition among states to attract higher investment has spurred easier business rules at the state level, as is the case with Gujarat, which tops in ‘ease of doing business’.
Currently, the biggest challenge to ‘Make In India’ lies in reforming the archaic labour laws that are an impediment to higher productivity and employment generation in the labour-intensive manufacturing sector. At the same time, workers’ unions have accused the NDA of being partial towards industrialists. The government must disprove this through relevant progressive changes. The labour ministry has to play an important role in consolidating labour codes on industrial relations, social security, wage and workers safety. Lack of skills or job-readiness erodes the competitiveness of an economy and affects productivity. Making India’s young demography job-ready is equally important for the success of the ‘Make in India’.

http://www.mydigitalfc.com/2016/reforming-india

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