On 31 Oct , PM Shri Modi unveiled the Statue of Unity
For 2 days, media ( online and offline ) were full of
reports / articles / analysis of its significance
Newspapers printed millions of words and TV channels
devoted hundreds of view-hours
Statistics were regurgitated : height / weight /
concrete / steel / copper / workers / years / cost etc
Then on 2 Nov , Shri Modi laid the foundation of a low cost economy, by announcing a slew of measures to boost our MSME sector
TV channels mentioned this in a passing reference of a
few minutes
Newspapers barely devoted a few column-centimeter of
real estate
Hardly any expert-panel debated its significance !
What makes MSME sector,
the foundation of our economy ?
Here is what :
·
Country-wide 65 million MSME provide jobs
to 120 million persons ( as per Shri Giriraj Singh – Minister of State for MSME
)
·
MSME sector contributes 38 % to our GDP and
45 % to our Exports / Manufacturing output
I am referring to the announcements made by Shri Modi
with regard to boosting MSME sector
These announcements will help lower the COSTS of the following INPUTS
:
COST of
MONEY
·
Quick access to credit at attractive terms
( Rs 1 crore in 59 minutes ! )
·
2 % subsidy on interest ( for MSME
registered for GST )
·
MSME exporters to get 5 % interest subsidy
( up from current 3 % )
·
Credit based on trade receivables ( by
analyzing GST / Income Tax Returns )
COST of
TECHNOLOGY
·
Rs 6,000 Cr scheme for technology
up-gradation ( 20 hubs / 100 spokes )
COST of
COMPLIANCE
·
Returns under certain Labour Laws to be
filed once a year ( instead of twice a year )
·
Computerized software to decide inspection
of MSME factories
·
Inspectors to file their reports in 48
hours
·
Easier process for Environment Clearances
and “ Consent to Establish “
COST of
LAND
·
70 % cost of “ Pharma Clusters “ to be
borne by the government
COST of SELLING
·
Minimum procurement by PSUs ( from MSME )
raised to 25 % ( from current 20 % )
·
3% procurement from MSME run by women
COST of
MANPOWER
- A mission will be launched to
ensure that MSME employees have Jan Dhan Accounts, provident fund, and insurance
These measures make
for a GOOD BEGINNING , and I hope that announcements
which will further lower their INPUT COSTS , will be made soon
But, we have a long
way to go to make ours’, a truly LOW
COST ECONOMY
I urge the Policy
Makers to look up my following blogs ( earlier
sent as emails ) , for suggestions on how to lower the costs of the
following left out INPUTS :
·
Land
·
Machineries
·
Materials
·
Manpower
·
Energy
·
IT / Communications
·
Transport / Logistics
·
Training / skilling
·
Systems / Procedures
Level Playing Field ? …………………………………………………………………………………[ 11 June 2016 ]
How to break the
vicious circle ? ......................................... …………….[ 03 July 2016 ]
Teach them to
fish ……………………………………………………………………… …………… .[ 05 Nov 2016 ]
Automation is
Inescapable ……………………………………………………………………………[ 30 Nov 2016 ]
Gist :
Reduce " Cost of Inflation " by limiting
" Annual Wages-Salaries Increases " to 75 % of
the preceding year's GDP number ( ie: if GDP for 2015, is 8 % , maximum salary /
wage increase that can be granted on 01
April 2016 , will be 6 % ) .
How much capital
needed to create ONE job ? ………………………… ……………[ 22 June 2017 ]
Solar Power at
Re 1 / kwh ? …………………………………………………………. [ 29 Jan 2017 ]
Unlimited Power
and around the clock …………………………………………. [ 29 July 2016 ]
Universal Basic Income ………………………………………………………………..
……………[ 20 Jan 2017 ]
Can Indian IT
re-invent itself ? ……………………………………………………..
……………[ 03 Feb 2017 ]
HOW CHINA MAKES CHEAP ? ………………………………………………………………………[
08 Nov 2014 ]
" BACK FACTORY " OF THE WORLD ? …………………………………………………………..[ 09 Sept 2015 ]
How to Boost Economy ………………………………………………………………………………[ 20 Sept 2017 ]
In a State of
Denial ? ………………………………………………………………………………….[ 22 Sept 2017 ]
What would
happen ? ………………………………………………………………………………….[ 29 Sept 2017 ]
Discovering the Obvious ? …………………………………………………………………………..[ 30 Nov 2017 ]
Not Good Enough ! ………………………………………………………………………………………..[ 02 Dec 2017 ]
Saving Jobs : Creating Jobs …………………………………………………………………………
[ 19 Dec 2017 ]
Free Electricity ? Possible ………………………………………………………………………
…. [ 28 Dec 2017 ]
Of Interns and Apprentices ………………………………………………………………………….[ 07 Jan 2018 ]
Whose Interest
? ………………………………………………………………………………………..[ 26 Jan 2018 ]
Car Grave-Yard
of World ? ……………………………………………………………………… [ 14 Feb 2018 ]
Modiji’s ( incomplete ) Message ! ………………………………………………………………. [ 13 Mar 2018 ]
A TradeWar Epidemic
? …………………………………………………………………………… [ 22
Mar 2018 ]
Thanks for
Speaking Up ! …………………………………………………………………………
[ 27 Mar 2016 ]
A
Robotic Invasion ? …………………………………………………………………………… [ 19 Apr 2018 ]
An Important Challenge ? …………………………………………………………………
. [ 01 July 2018 ]
The E Commerce Elephant ……………………………………………………………………………[ 02 Aug 2018 ]
And a final observation :
Without waiting for formulation of any MSME POLICY , Shri Modiji just went ahead and made these announcements !
I urge Shri Modiji to encourage his cabinet colleagues
to start making similar announcements without waiting for finalization of the
following :
# Electric
Vehicles Policy
# E Commerce
Policy
# Data
Protection Policy
# Old Vehicle
Scrapping Policy
# Export Policy
# Intelligent Transport
Policy
# $ 5 Trillion
GDP Economy Policy
# Solar Energy
Storage Policy
Of course , in hindsight , some decisions may turn out “
poor “ and seen as “ mistakes “
But “ not taking any decision “ is not an option !
There is no shame in admitting such “ honest mistakes “
and make a “ course correction “
Thank You , Shri Modiji
!
04 Nov 2018
www.hemenparekh.in
/ blogs
====================================================================
Added on 04 Nov 2022 :
India has cheapest manufacturing cost globally, bags 31st position: Report
Extract :
India has been ranked as the nation with the cheapest manufacturing cost ahead of China and Vietnam, according to a report.
According to the US News and World Report, out of 85 nations, India has bagged the 31st position in the overall Best Countries ranking.
India featured at the 37th spot in the 'Open for Business' category.
The report evaluates 85 countries across 73 attributes. Attributes are grouped into 10 sub-categories, including adventure, agility, entrepreneurship, open for business, social purpose and quality of life.
Under the open for business sub-category, India has scored 100 per cent when it comes to cheap manufacturing costs.
But in 'favourable tax environment', it has scored 16.2 out of 100; 18.1 in the 'not corrupt' category and 3.5 in 'transparent government policies'.
Similarly, under the 'quality of life' segment, India has scored 1.9 in 'income equality'; 4.3 in 'safe'; 2.3 in 'well-developed public health system'; and 9.9 in 'economically stable' sub-parameter.
The government has taken steps such as rolling out production linked incentive schemes and reducing compliance burden with a view to make India a global manufacturing hub.
In the overall Best Countries ranking, Switzerland has topped the chart, followed by Germany, Canada, US and Sweden.