<\/strong>
One of Narendra Modi<\/a>’s first promises when elected India<\/a>’s prime minister in 2014 was to revive the country’s manufacturing sector. India had been de-industrializing since the early part of the century and policy<\/a> makers correctly argued that only mass manufacturing could create enough jobs for a workforce growing by a million young people a month.
In his first major speech as prime minister, Modi invited the world to help: “I want to appeal all the people world over [sic], ‘Come, make in India<\/a>,’ ‘Come, manufacture in India.’ Sell in any country of the world but manufacture here.”
The “Make in India” slogan quickly developed into a full-fledged government program, complete with a snazzy symbol — a striding lion made out of meshed gears. Government officials spoke at length about increasing foreign direct investment and improving the business climate to attract multinational companies. Careful targeting of the World Bank<\/a>’s Ease of Doing Business indicators raised the country 79 positions in the five years after Modi took office.
And, after all that, in 2019 the share of manufacturing in India’s GDP stood at a 20-year low. Most foreign investment has poured into service sectors such as retail, software and telecommunications<\/a>. “Make in India” has failed, replaced by a government that never admits defeat with a call for “self-reliance.”
Now, exactly 30 years after India turned away from central planning and liberated the private sector, the government is again handing out subsidies and licenses while putting up tariff walls. Modi shut down the 1950s-era Planning Commission<\/a> when he took office. Yet the bureaucrats in New Delhi are back to picking winners and directing state funding to favored sectors.
They’re doing so through new “production-linked incentive” schemes, in which companies apply for and receive extra funding from the state for five years in return for expanding manufacturing in India. Such incentives were originally meant to support domestic mobile-phone production. Following energetic lobbying, the government began extending them blindly to all sorts of sectors, from batteries to food processing to textiles to specialty steel.
Money is apparently no object: A government that has held off on income support during the pandemic has budgeted Rs. 2 trillion (roughly $27 billion) for these industrial subsidies.
The only thing worse than socialism with central planning is industrial policy with no planning at all. There’s no logical coherence to the sectors chosen, all of which seem to have been included for different reasons.
Is the scheme supposed to supercharge job growth? Then why not focus on labor-intensive sectors such as apparel? Is India aiming for economic independence from China? Then subsidies should be limited to sectors where China dominates supply chains, as part of a broader, China-focused trade policy that partners with the United States, Australia and others. Is the goal to invest in cutting-edge sectors? Then the government should explain why bureaucrats would do a better job than the flood of private equity that’s pouring into India.
Instead, all the problems of India’s socialist-era past are returning, cunningly disguised. Excessive closeness between bureaucrats and the beneficiaries of industrial policy? India’s top civil servant recently called for an “institutional mechanism” that provides “hand-holding” for companies. Endlessly shifting targets? Companies that just began receiving subsidies are already asking the government to relax production quotas.
It took decades for India to put its old, inward-looking and uncompetitive manufacturers out of business. Now the government is giving cash to new, inward-looking and uncompetitive companies to produce for the domestic market. Meanwhile, it’s hard-wiring into the economy the kind of connections between industrial capital and policy makers that are nearly impossible to disentangle.
The government’s defenders point out that its investor-friendly reforms weren’t answered; nobody came to “Make in India.” And, they ask, hasn’t China profited handsomely from subsidizing its own manufacturing sector?
Such arguments miss the point. Modi’s manufacturing push never went much further than gaming the World Bank’s indicators. No investor believes structural reforms, particularly to the legal system, have gone deep enough. India has a large workforce but too few skilled workers. To top it all off, the rupee is overvalued. Rather than work at solving these interconnected and complex problems, politicians in New Delhi have decided to paper over them with taxpayer money.
Perhaps picking winners has worked for China. What Indians know for certain is that it did not work here after decades of trying. Sure, public investment in sectors of vital strategic importance — electricity storage, perhaps, or cutting-edge pharma — is defensible. But when you start throwing money at every sector that you wish had developed on its own, then all you’re announcing to the world is that you’re out of ideas.
India’s haphazard foray into industrial policy is going to fail, just as “Make in India” did. And it’s likely to cost the country billions along the way.
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由Mihir沙玛
之一莫迪选举时的第一个承诺印度的首相在2014年恢复国家的制造业。初以来印度一直de-industrializing世纪的一部分政策制造商正确地认为,只有大规模生产可以为员工创造足够的工作一个月增长了一百万名年轻人。
在他的第一次重要讲话作为总理,莫迪邀请全世界来帮助:“我想吸引世界各地所有的人(原文如此),“来,在印度”、“来,在印度制造。出售在世界的任何一个国家,但生产。”
印度的“让”的口号很快发展成一个成熟的政府项目,配有一个时髦的象征——一个大步狮子制成的网状齿轮。政府官员在谈到增加外国直接投资和改善商业环境来吸引跨国公司。仔细瞄准的世界银行做生意的易用性指标提高了国家79个职位在莫迪上台后五年。
,毕竟,2019年,制造业在印度GDP的份额站在20年来的最低水平。大多数外资涌入,零售等行业服务,软件和电信。“印度”失败了,取而代之的是政府从不承认失败并呼吁“自力更生”。
现在,整整30年从中央计划经济和印度拒绝后解放了私营部门,政府再次发放补贴和许可证而关税壁垒。莫迪关闭了1950年代计划委员会当他上台。然而,官员在新德里回到挑选赢家和指导国家资金支持部门。
他们这样做通过新的“根据奖励”计划,公司申请领取额外的资金从国家五年,以换取在印度扩大生产。这样的激励措施最初是为了支持国内手机生产。精力充沛的游说后,政府开始他们盲目扩展到各种各样的领域,从电池到食品加工纺织品特种钢。
钱显然是没有对象:政府一直在流感大流行期间收入支持预算Rs。2万亿(约270亿美元),这些工业补贴。
唯一比中央计划的社会主义,是产业政策,没有计划。没有逻辑连贯性所选择的行业,这一切似乎已经包括了不同的原因。
这个计划应该超负荷的工作增长吗?那么为什么不关注服装等劳动密集型行业呢?是印度的目标从中国经济独立?然后补贴应该仅限于中国主导供应链领域,作为更广泛的一部分,中国的贸易政策与美国合作伙伴,澳大利亚和其他国家。目标投资尖端行业吗?政府应该解释为什么官僚们会做得更好比私人股本的洪水涌入印度。
相反,印度的社会主义时代的公社过去返回的所有问题,巧妙地伪装。过度亲密之间的官僚和产业政策的受益者?印度的公务员最近呼吁“体制机制”,为企业提供“牵手”。没完没了地转移目标?公司刚开始接受补贴已经要求政府放松产量配额。
印度将其老,花了几十年的保守和竞争力制造商的业务。现在政府给新的现金,内向和缺乏竞争力的公司为国内市场生产。与此同时,它的硬连接到经济的工业资本和决策者之间的联系几乎是不可能的解决。
政府的拥护者指出,其投资者改革没有回答;没有人来”在印度。“他们问,没有中国从补贴自己的制造业,中饱私囊?
这样的争论没有抓住问题的关键。莫迪的制造业推动不了更加深刻的游戏世界银行的指标。没有投资者相信结构性改革,尤其是法律制度,已经足够深。印度有大量的劳动力,但太少的熟练工人。最糟糕的是,印度卢比是高估了。而不是在解决这些相互关联的工作和复杂的问题,政治家在新德里决定掩盖用纳税人的钱。
也许挑选赢家为中国工作。印度人肯定是经过几十年的努力并没有在这里工作。当然,公共投资领域具有极其重要的战略地位,电力储存,或先进的制药公司——是站得住脚的。但当你开始把钱在每一个部门,你希望自己的发展,那么所有你向全世界宣布,你的想法。
印度的偶然进入产业政策会失败,就像“在印度”。它可能让国家损失了数十亿美元。
之一莫迪选举时的第一个承诺印度的首相在2014年恢复国家的制造业。初以来印度一直de-industrializing世纪的一部分政策制造商正确地认为,只有大规模生产可以为员工创造足够的工作一个月增长了一百万名年轻人。
在他的第一次重要讲话作为总理,莫迪邀请全世界来帮助:“我想吸引世界各地所有的人(原文如此),“来,在印度”、“来,在印度制造。出售在世界的任何一个国家,但生产。”
印度的“让”的口号很快发展成一个成熟的政府项目,配有一个时髦的象征——一个大步狮子制成的网状齿轮。政府官员在谈到增加外国直接投资和改善商业环境来吸引跨国公司。仔细瞄准的世界银行做生意的易用性指标提高了国家79个职位在莫迪上台后五年。
,毕竟,2019年,制造业在印度GDP的份额站在20年来的最低水平。大多数外资涌入,零售等行业服务,软件和电信。“印度”失败了,取而代之的是政府从不承认失败并呼吁“自力更生”。
现在,整整30年从中央计划经济和印度拒绝后解放了私营部门,政府再次发放补贴和许可证而关税壁垒。莫迪关闭了1950年代计划委员会当他上台。然而,官员在新德里回到挑选赢家和指导国家资金支持部门。
他们这样做通过新的“根据奖励”计划,公司申请领取额外的资金从国家五年,以换取在印度扩大生产。这样的激励措施最初是为了支持国内手机生产。精力充沛的游说后,政府开始他们盲目扩展到各种各样的领域,从电池到食品加工纺织品特种钢。
钱显然是没有对象:政府一直在流感大流行期间收入支持预算Rs。2万亿(约270亿美元),这些工业补贴。
唯一比中央计划的社会主义,是产业政策,没有计划。没有逻辑连贯性所选择的行业,这一切似乎已经包括了不同的原因。
这个计划应该超负荷的工作增长吗?那么为什么不关注服装等劳动密集型行业呢?是印度的目标从中国经济独立?然后补贴应该仅限于中国主导供应链领域,作为更广泛的一部分,中国的贸易政策与美国合作伙伴,澳大利亚和其他国家。目标投资尖端行业吗?政府应该解释为什么官僚们会做得更好比私人股本的洪水涌入印度。
相反,印度的社会主义时代的公社过去返回的所有问题,巧妙地伪装。过度亲密之间的官僚和产业政策的受益者?印度的公务员最近呼吁“体制机制”,为企业提供“牵手”。没完没了地转移目标?公司刚开始接受补贴已经要求政府放松产量配额。
印度将其老,花了几十年的保守和竞争力制造商的业务。现在政府给新的现金,内向和缺乏竞争力的公司为国内市场生产。与此同时,它的硬连接到经济的工业资本和决策者之间的联系几乎是不可能的解决。
政府的拥护者指出,其投资者改革没有回答;没有人来”在印度。“他们问,没有中国从补贴自己的制造业,中饱私囊?
这样的争论没有抓住问题的关键。莫迪的制造业推动不了更加深刻的游戏世界银行的指标。没有投资者相信结构性改革,尤其是法律制度,已经足够深。印度有大量的劳动力,但太少的熟练工人。最糟糕的是,印度卢比是高估了。而不是在解决这些相互关联的工作和复杂的问题,政治家在新德里决定掩盖用纳税人的钱。
也许挑选赢家为中国工作。印度人肯定是经过几十年的努力并没有在这里工作。当然,公共投资领域具有极其重要的战略地位,电力储存,或先进的制药公司——是站得住脚的。但当你开始把钱在每一个部门,你希望自己的发展,那么所有你向全世界宣布,你的想法。
印度的偶然进入产业政策会失败,就像“在印度”。它可能让国家损失了数十亿美元。
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