NO ONE doubts that Narendra Modi, Indias prime minister (pictured), is a capable speaker. On September 25th he called together hundreds of diplomats, business leaders, journalists, ministers and others to a swanky hall in Delhi to launch his latest marketing push. The event was broadcast live across India and to diplomatic missions abroad. A remarkable cast of industrial heavyweights were called on to show support, including Cyrus Mistry of Tata Sons, Reliances nervy-sounding boss, Mukesh Ambani, the chairman of Wipro, Azim Premji, the chairman of Aditya Birla Group, Kumar Mangalam Birla, and the chairman of ITC Limited, Yogesh Chander Deveshwar. Over the course of two hours these business cheerleaders, along with ministers and then Mr Modi himself, took turns to explain why it would be a great thing if industrial production, in particular labour-intensive manufacturing, could blossom in India. They are absolutely right. India needs to create lots of jobs—perhaps 1m additional ones a month—if it is to employ its booming population. One speaker suggested 90m manufacturing jobs could be created in India over the next decade. Mr Premji set out how Wipro—better known for IT—has five manufacturing units in India (they make hydraulic cylinders) and overall relied on a broad network of 1,200 Indian suppliers, meaning lots of jobs created indirectly. Mr Birla spoke of a new high-end aluminium manufacturing site in Odisha (formerly Orissa) which now does quality work for the firm that used to be done in a British factory. A representative from Lockheed Martin, an American defence firm, explained how its factory near to Hyderabad makes component parts for its global production of the massive C130-J Hercules plane. A stronger manufacturing sector could help in a host of other ways, suggested speakers, linking India into global supply chains, boosting exports, helping to reduce the current-account deficit and so on. Mr Ambani concluded that Indias economy could boom in the long run, at a sustained rate of 8-10%, growing quicker than China, if only the right conditions were created. All this looks and sounds attractive. So, too, do a flash new website that Mr Modi inaugurated, a new symbol—a lion made up of cog-wheels—and some new brochures that set out how India is a bit more welcoming to manufacturers. But was the exercise anything more than a PR event? As one cynical member of the audience grumbled, it seemed to be a big palaver for the launch of a few marketing tools. What has actually changed in India as Mr Modi pushes manufacturing? First, discount the worst gush from business leaders. The likes of Mr Ambani and Mr Deveshwar may be embarrassed to be reminded of how sycophantic they were in Mr Modis presence. Mr Ambani waffled on about being blessed with a leader, the unique leadership quality of a prime minister, a man who dreams and he does, who has apparently motivated a billion Indians to dream and do. Mr Deveshwar was even more craven, thanking the Almighty for the leadership given to us in Mr Modi, for your astuteness, your wisdom...Sir, Im profoundly inspired by the boldness of your vision and the simplicity with which you have communicated. Mr Modi sat stony-faced as they fawned. But he probably agrees with the implied message: that most of what it takes to boost manufacturing in India is strong leadership from him, as he showed when he was chief minister of Gujarat. Indeed, when he spoke, he referred back to his success in Gujarat, saying that with the same civil servants and resources as the rest of the country, he had produced striking industrial successes. He expects more of the same in the country as a whole. Sadly, leadership alone will not do it. Matters are more complicated than that. Mr Modi, endearingly, admitted in his speech I am not a big economist while urging investors not to think of India only as a big emerging market, but also as a place for production. As he suggests, achieving that requires progress in a host of areas. He spoke of an urgent need for skills development as far too many of Indias youngsters are poorly prepared for globally competitive work (though that is a huge mission, since it means fixing a rotten school and university system) and identifying 21 clusters for industrial development. He spelt out how infrastructure would improve (but not where massive capital to fund that will come from). Laudably, he emphasised the need to make India a far easier place to do business by scrapping red-tape and oppressive rules, mentioning a recent meeting he had with the World Bank to discuss Indias awful ranking—134th—on its annual ease of doing business assessment. Mr Modi thinks India should aim to be ranked much higher, quickly, in the top 50 countries
Posted on: Fri, 26 Sep 2014 18:30:00 +0000
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