Manufacturing vs Services: Is India Getting it Completely Wrong?
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- Опубліковано 16 жов 2024
- Will a push for Manufacturing eventually hurt India's economy?
The world has seen the success of China and its exports led growth strategy. But recently we are also witnessing major cracks in this strategy.
Indian economy is also developing towards a Manufacturing led exports based economy. The government is insistent on pushing Make in India for Manufacturing and reducing our reliance on imports.
Will this strategy work?
Has such a strategy worked Anywhere?
Join the debate on Indian economy and let us know what you think
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Excellent content and presentation
Glad you liked it!
Very well researched and informative video with an apt conclusion 👍👍👍 However, I would have also liked to hear more about higher multiplier effects of Manufacturing which is an important concept in this discussion. Just a suggestion! Keep it up 👍👍👍
Thanks for the feedback. Yes I do agree that manufacturing can have a multiplier effect in the sense that it can create many more upstream and downstream opportunities along the value chain. But for that the focus should be on value addition instead of import-assemble-export model. If we can do that, it'll be great for India!
Fully agree.
Great information..❤❤
thanks a lot!
India mein skilled, semi skilled workforce kahan se laoge kisi bhi sector k liye. Sabko engineers dikhte hain but millions of young people have zero skills in india
Good content ,knowledge full vedio.
What an insightful video
Thanks
Simply outstanding
Thanks a lot!
Manufacturing has been neglected in this country for far too long. Any country must invest in manufacturing to be self-sufficient. China understood this as early as the 1980s. They opened up the economy and focused on building heavy industries, and automation, leading to their immense rise in science and technology. While we still can't produce a proper jet engine, China already has 5th-generation aircraft, and may well be going towards the production of 6th-generation aircraft indigenously. Unless we start to focus on developing our own heavy and light industry and control the supply chain, we will forever be dependent on foreign powers and will be at their mercy.
Well we always take the example of China because we are used to always compare with that country as if we are perennially in a competition with them. So let me take few names - Singapore, Hong Kong, UK, Switzerland. What do you think drives the economies of these countries. I would even say USA - what do you think is America known for? is it really manufacturing?
So while my point is not that Manufacturing is not reqd, but simply that is it being given far too much importance in the narratives than it deserves. It is just a debate i'm throwing open. What say?
@@econifywithanubhav Well, I think one of main reasons that we like to compare India to China is because both countries were essentially in the same situation around 1950s. China was in even dire situations around 1980 when cultural revolution was coming to an end. The real growth of China started from 1990s after complete opening up their economy. They understood that they need to develop their own industries from scratch in order to be self sufficient. Heavy American investment helped them to gain he knowledge in engineering and technology from bottom up. They did engage in lot of industrial espionage to gain access to critical military technologies. Even though we do like to compare ourselves to China, at the moment there really isn't much of a comparison. Our domestic politics is what's holding us back. We lack unity, proper planning and execution and politicians are as corrupt as they come and nothing get's done in time due to complicated bureaucracy. The recent emphasis of foreign powers on India is solely due to the fact that they want to use India against China and in time of such conflict, they will take the full advantage of it.
@@econifywithanubhav We can't solely depend on services sector for our growth. While service sector has created lot of jobs, these jobs are at the bottom of the service chain. We claim to be exceptional at IT sector, yet there is no independent operating system and no domestic IT infrastructure in this country. We are immensely dependent and vulnerable in the particular sector where we claim to be the best at. The dividend on the investment on manufacturing may take time, but we must do it. Otherwise we will be replaced.
@@amithu5 I do agree that our claim to fame in the IT sector is at stake! I dont think India ever claimed to be the best in IT sector, what we could claim was decent talent available CHEAPLY!
Now this leverage is at stake because AI is disrupting everything and I dont see India playing a major role in the development of AI. Our behemoths like TCS and Infy will lose their dominance if they miss out on the AI bus.
Regarding Manufacturing, yes we should definitely push for it because global supply chains are increasingly becoming vulnerable to geopolitics! But the only catch is that the focus should be on knowledge transfer and value addition instead of just import-assemble-export model. Hope schemes like PLI will benefit a lot more in future.
No manufactured assembled in India brother
Sorry didn't get your point.
@@econifywithanubhav you mentioned iphone manufactured in India is not manufactured but assembled these companies buy in skd and ckd assemble them on their assembly line that is smt line and put a tag of made in India but its not
kya kehna chahte ho dost
What about ease of doing business i.e. cost of compliance... Getting all the approvals for setting up of manufacturing unit is a such a difficult task... Compare that to setting up a service unit.. even something as basic as retail shop can be set up very easily... One must factor that also... "Cost of compliance"
hi! ya thats a great point. so you mean to say that the gestation period of manufacturing is pretty high as compared to others right? It takes a lot of time and capital to set up a manufacturing unit, and hence delayed realisation of benefits. Is that your point?
@@econifywithanubhav yeah kind of.., actually I was leaning towards, how setting up a service unit is less complicated since overall legal framework is easier as compared to a manufacturing unit.. imagine the licenses one needs to set up manufacturing plant as against setting up of a service unit.. the cost of these compliances makes manufacturing prohibitive
@@manishsheth2502 true! entry barriers are higher in manufacturing as compared to services, mainly because of higher capital requirement.
But if we keep aside the initial cost and time for a bit, what is your opinion on the long term impact of manufacturing push?
@@manishsheth2502good point but it's been a while that this govt stopped listening to feedback
It's not even a debate. Why not do both? Whoever is fit for manufacturing will go there and whoever is fit for services will go there. Not to mention this will ensure India becomes more diverse in terms of jobs and becomes more self sufficient. "Economist" Raghuram Rajan has never been correct in his analysis/predictions and has lost all credibility.
hi! Thanks for sharing your opinion.
But I would not like to just brand someone without giving any logical arguments. Raghuram Rajan is no small man - he is invited worldwide by biggest institutions to share his opinions.
So my point is - if you do not agree with him, which is absolutely fine, you should come up with logical counter arguments to what he says, instead of just branding him as a failure! Then it becomes a more value adding conversation.
I have made a detailed video on his opinions and all the data that he presents : ua-cam.com/video/hCkqCNN8MKQ/v-deo.html . if you can't click here do check it out on my channel.
Would love it if you could watch it and then come back and share your thoughts.
And this debate is up because when policymakers think that a certain sector is more important than the other one, then we start seeing more policy support towards that sector. You only have limited money and such priorities decide where that money goes. Hence the debate.
Do you agree?
One side of the story!
How so ?