Make-In-India Pitch Shouldn't Make Country Sweatshop For World: Industry Leaders

Even as the government aggressively pitches for foreign and local investments into India's manufacturing sector through its Make-in-India programme, business leaders warn that this hard selling shouldn't turn the country into a sweatshop for the world.

"I think that some low scale manufacturing may move to India. However, if you have to build Brand India, you have to first build global Indian brands," industrialist Anand Mahindra said on the second day of the week-long Make in India exhibition and awareness event.

The Make in India week, inaugurated by Prime Minister Narendra Modi on Saturday (February 13) and held in partnership with state of Maharashtra, is showcasing the capabilities of India in the manufacturing sector.

As many as 192 multinational corporations and Indian companies, comprising 11 sectors are participating in the event, which will attract 8,000 business delegates.

Seventeen states are showcasing their manufacturing prowess at the event, which is also expected to witness 2,500 bilateral meetings.

Kumar Mangalam Birla, chairman of the $40 billion Aditya Birla Group, said that any idea of promoting India as just a manufacturing base was misleading.

"Especially in the last ten years, there is a sense of pride in India's entrepreneurship unlike before," said Birla, adding that Indian manufacturers have been at the forefront of innovation as well as devising sustainable manufacturing processes. India already has a track record in manufacturing and it's now about going into the next phase.

Both business leaders were participating in a panel discussion at the CNN Asia Business Forum 2016 as part of the Make In India Week, organised by the Confederation of Indian Industry in partnership with Department of Industrial Policy and Promotion and the Government of Maharashtra.

Mahindra said that it would be wrong to mandate Indian companies either to manufacture or to innovate.

"This is a rallying drive," he said of the 'Make in India' campaign.

The government is trying to gather attention.

"Once it has set the direction, the government should move out of the way," Mahindra said.

Thereafter, the government should only be putting in place institutions that promote entrepreneurship. More businesses are going to flow into companies that are carbon neutral, he added.

Earlier on Sunday, Finance Minister Arun Jaitley said the government was committed to making India's tax regime stable and predictable and that the government would soon announce a series of bank reforms aimed at reinvigorating the sector.

Economic Reforms
Assuring the audience that reforms in India were ongoing, Jaitley said, "Second generation reforms began two years ago to realise India's true potential. What we have realised is that unreasonable tax demands never bring revenue."

He said GST was a big tool that will bring reform in the way India does business.

"Even if India's GST model is watered down, we have to start somewhere,” he added.

Speaking of public sector banks that are stressed due to the high proportion of bad loans, the finance minister said that the state will not get out of the banking business. Jaitley said that these banks are important for the purpose of geographical reach. However, these banks and their boards have to be professionalised.

"Digital technology should be used to remove income inequality," he said.

The Mumbai event, where many state governments have also showcased their capabilities to attract industry investments, was also attended by Chhattisgarh chief minister Raman Singh on Sunday (February 14).

"We are in discussion with several large corporate and industry leaders including Lanco and Jindals, who have shown interest in investing in the state," said Raman Singh in a media round table.

The state is also expecting large investments in the new areas such as food processing, renewable energy, solar-power equipment, electronics and logistics, besides the core sector, he added.

"Industry policy reforms such as lower power tariff, single-window clearance and low cost for commercial and industrial land introduced by the state recently and the availability several industry raw material in the state are main attractions to the industrialists to look at the state as an attractive investment destination," said the Chhattisgarh chief minister.