Category Archives: Growth

Here is what stops India’s industrial growth.

India is shining…! Or, that is what the government wants us to believe. The emptiness of this claim is visible in the decelerating economic growth since last few years. The reasons for this disappointing performance are not difficult to find.

It is very difficult to be an entrepreneur in India. Even though the country needs a lot of entrepreneurs, it is hostile to entrepreneurship. The Indian government and its bureaucracy has always treated Business and Industry as a milking cow. Officially, businesses are imposed various types of taxes and levies. The impossible maze of rules and regulations encourage another unofficial extraction of money from the businesses in the form of palm-greasing amount for various permissions, licenses, certificates etc.

This all has lead to a step-motherly treatment to industry and entrepreneurs. Instead of building sound infrastructure and facilitative rules and regulations, the government and politicians don’t leave a single opportunity to strangle the business and industry. I saw a live example of the negligence, exploitation and apathy of the government towards industry during visits to Silvassa and Daman, the union territories on the border of Gujarat.

1) Even though thousands of SME units are located in this region, the infrastructure in Daman and Silvassa is at its worst. As soon as we enter Kachigam from Vapi, the miserable quality of road welcomes you. The one kilometer stretch passing through one of the industrial area, takes at least 10 minutes, with not even 5 meters of flat road to be found anywhere. Driving this through this road is a hellish experience. Theoretically, every year some money is sanctioned for improving this road, but the condition is simply unchanged. The pathetic condition of this road has remained the same since many years.

2) The poor infrastructure has grave impact on the industries here. A lot of international companies fail the units here in their internal evaluation audit only because the infrastructure in the vicinity is not conductive for the business. This puts the industries here at a huge disadvantage.

3) The Daman-Silvassa has an independent Member of Parliament to represent this region. But, instead of helping the industries in this region through proper infrastructure and facilities, the politicians here seem to be busy ‘developing’ their own future. Instead of helping the industry which brings jobs and prosperity to the region, their lieutenants are known to harass the industrialists by running a parallel government in the industrial belt milking the entrepreneurs for ‘maintaining’ the region. Every now and then, these pseudo ‘governors’ drop in for various favors, including seeking financial contributions from the owners of the units in the area. These people, ‘blessed’ by the reigning politician, ensure that all types of contracts go to them only and their own people are employed in these companies, regardless their qualification or suitability for the post.

4) It seems the poor central government does not have funds to maintain roads and other infrastructure in Daman-Silvassa and hence the volunteers from the ruling MP’s cadre have to work hard to go and collect the ‘contribution’ themselves from the industry owners, to build the roads and maintain the infrastructure. In spite of the ‘hard work’ of these volunteers in the form of collecting repeated contributions, the roads are not in place. May be the pit is too deep to be filled.

India will have to wait to grow its industry till all such deep pits are filled.  Till then, the industry will continue to struggle for growth and the country will have to continue to live “in the pit…”