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Delhi returns to BJP Demise of a media baron... Delhi is distant TGS- The king storyteller The star of Spencers is no more Tatas moving out of urea production... Cement prices continue to rise… Where a state respects its litterateurs… Not just in-laws (and outlaws); they’ve renowned academics at the helm! More heat than light Discoms deserve better… Welcome changes that testify to Jayalalithaa’s return to health Shanti and Sadhana through Music Whistle-Stop Tour of Raghuram Rajan S V Raju – a ‘good’ true liberal SoA @ 80 Strengthen the base... Online not in line with brick and mortar businesses... …and of a popular trade leader EVM is tamper-proof The Ports’ Pasha expands into Tamil Nadu Quality silica from Neyveli Marketing expert Balagopal is no more For whom the bell tolls? Tough task taking states together Welcome GST B H Kothari - a tribute Road development slows down IPL type auction for VCs? EEC at the National Media Centre Scientists urged to take up farmer-oriented research Fortune for Indian Airlines Things happen by accident and not by design... Sweet news for TN sugar mills Modi and the lady Welcome thrust on trade in Modi’s foreign visits... Boy, can you beat these? ONGC at KG Basin Come elections, come advertisements... A C Muthiah – his munificent bequeaths to science Tribute Convulsions in The Hindu Vibrant Gujarat More Shakti to resource mobilisation... Return to king coal for urea... Rs.1600 crore paper board plant of TNPL L&T- the specialty of special purpose vehicles Preserving for the future Focus on quality of power - its only around 170-180V Breaththrough in malaria control China invests in India When small is no larger beautiful.. Make standards certification mandatory... Computation of GDP – conundrums continue The balancing act The why of tax incentives Editor's Says Like Hinduism: many paths to reach God... Godspeed, Chief Minister JJ Tihar, Puzhal not different from Parappana Agrahara Editor's Notes CIPET hqrs to stay at Guindy – for the present? The ‘Jayanthi Tax.’ Align crops to agro climate endowments… An enemy’s enemy is a friend This scant respect for Law F C Kohli - his concerns all embracing Auto components surge… Fortune 500 review TELANGANA at last…BUT Odisha: spectacular win by Naveen Patnaik Measuring roof tops in terms of KW/MW A welcome initiative by the judiciary Making ‘my Amaravati’... Cutting the nose to spite the face Excel Generators provide the vital back-up MHC should not return to its old indisciplined ways Robber barons everywhere Small units prefers to remain small... CRS, a jewel among managers, is no more. R Sridhar steps down as CEO of Shriram Capital The Gulf aviation boom Revive development banks... Intellectual of rare qualities For whom the MIDS bell tolls? 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Haul over the coal S Ramanathan – a versatile musician, musicologist Kinetic Karnataka Cleaning Ganga – relocate tanneries and install electric crematoria Music happens Eternal support for capitalisation of PS banks The sea- saw battle continues... Airlines in India: cost and space Kulandai was a giant The nuclear option Recognition to role of NBFCs.... New IT products of Ramco in the pipeline… Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Tribute – UCAL Selvan… The ‘Ayyo-yes’ is no more No Maha Koottani in TN... Another Indian music maestro at the UN Land reclamation from sea appears cheaper! Tatas moving out of urea production... Parliament in paralysis... Solar, solar everywhere … Paytm karo... Limit foreign borrowings to hi-tech, export potential projects... 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Increasing non co-operation of state leaders Adapt Vajpayee dinner diplomacy Muffled voices for merit… Air Asia India will set new benchmarks for budget travel Sri Lanka votes for change Tribute – M V Murugappan Why land prices zoom in TN? TN accounts for the largest recruits by the IT sector Streamlining mandatory third party cover A glass full of corruption Mu Sigma – is no more Bihar elections - the Rajaji formula worked Padma Bhushan for A Ramakrishna A rich pool of talent not utilised…. The brown list of Venkitaramanan Kudos to NDTV... Remembering Indira Sivasailam... Poor quality of university VCs When the President was rendered homeless… Secularism and anti-Hinduism Adharma of opposition politics GNS - 100: our first subscriber How Air-India loses customs... Of course, Gujarat is vibrant Wise Presidents London, London Narayan CSR and CMI: promise of another Srinivasan Ramanujan... There was flood of milk. Reason: no milk commissioner! Maximising the micro pricing … IAS invades NDDB... Five star activism stalls development activity A proud Madrasi Pharma – overdose of copying Telangana in top gear… Should we change the official year? Delhi is distant… No engine for this car
 
CII projects higher growth…

SUCCESSIVE DROUGHTS of the last two years had contributed to zero agriculture growth.  A vast range of commercial crops, including sugarcane and cotton, recorded decline, causing widespread misery in several parts of rural India.

In this background the prediction of an average monsoon is welcome. This kindles hopes on a significant improvement in agriculture growth. This has two favourable tidings: first a higher rate of economic growth, with agriculture sector accounting for 14 per cent of GDP, the jump in the agricultural sector could contribute to more than one per cent growth of GDP. CII predicts economic growth can be around 8.2 per cent!

The second is its impact on the rural economy. Better incomes would trigger higher spending on goods and services and will help increased production of consumer goods and other services.

Naushad Forbes, who had taken charge as President-CII, pointed to several green shoots: much higher demand for automobiles and tractors, step up in investments on highway development, railways and other infrastructure sectors and an improvement in investor sentiment. He also referred to the Centre facilitating states to undertake reforms in crucial areas like land and labour. Forbes pointed to Andhra Pradesh, Gujarat, Madhya Pradesh and Rajas-

than undertaking labour reforms to ease doing business. He also referred to Rajasthan and Tamil Nadu focusing on land reforms intended to facilitate acquisition for business purposes.

CII has listed a few sectors with high potential for growth, like textiles and garments, which constitute a significant share of exports, electronic hardware, cement, iron and steel, engineering, defence and aerospace.

 

No ‘Connect’ with electronics hardware

Despite years of references to the potential of electronic hardware manufacture, there has been little action on the ground. Tamil Nadu began well with export on the annual ‘Connect’ event. In the early 2000s, there was an explosive growth in the IT, communications and telecom hardware industries in Sriperumbudur and elsewhere. Remember Nokia – Foxconn setting up world class facilities and Nokia emerging the largest manufacturer of cell phones? In quick time, this thrust was lost. Confusion over tax policy and poor industrial relations led to the failure to build on this excellent start. Several electronics units in that complex closed down.

F C Kohli, who headed TCS and triggered the IT boom, has been an ardent advocate of electronic hardware. For over two decades Kohli has been suggesting the nurture of electronic hardware education in around fifty institutes of higher learning and backing these electronic hardware engineers with high volume production of a vast range of electronic hardware and components.

 

Make in India efforts hurt

 

Such an approach also needs tweaking tax policies. I refer to the failure of doing this hurting the Make in India effort by citing the experience of the Dell Computers (DC). This computer giant has set up a unit in Sriperumbudur and produces around 3000 PCs and laptops per day. With several state governments promising free laptops for students, combined with the tremendous growth in demand for these from other sectors, one can imagine the potential for volume production. But, on a visit to this facility, I noticed a few interesting factors: the first is the modest volume of production, of around 3000 per day or around a million a year. Second, the unit provides employment to local women with a higher secondary pass who are quite nimble and efficient.

The matter of concern relates to the very poor, indigenous content: except the CD manual, the sponge and carton used for packing, other items are all imported. Foxconn imports these from Taiwan in CKD packs. Reducing the excise duty from 10 per cent to 2 per cent can trigger manufacture of several components by local units.

Another equally sad experience related to the free mixies and fans offered by Tamil Nadu not resulting in any big orders for Indian manufacturing units. For their low prices, these are imported from China, of indifferent quality.

Forbes and his team at CII should address this issue by encouraging Indian manufacturers to go for high volume production as does China.

 

High capacity, low utilisation, high prices

 

In the Indian context, even in sectors where volumes have been high, the traditional pre-liberalisation habit of cartelisation persists. We have been pointing to such practice in the cement industry: despite a handsome expansion of capacity which is under-utilised, cement prices have been manipulated by cartelisation. We have been pointing to the huge difference in cement prices by such unethical, oligopolistic cartels.

 

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