The Covid-19 pandemic is creating a greater awareness among people in India that this is the time to make radical changes and take steps for faster growth of the manufacturing sector and the economy, Maruti Suzuki India Chairman R C Bhargava said on Wednesday.
“In the last five-six years, many changes have been made by the government in policies, which are making conditions much more conducive to competitive manufacturing. To the best of my understanding and knowledge, the government is very aware of all other steps which are needed to ensure and bring about competitiveness of the Indian industry,” said Bhargava.
Despite the implications of Covid-19, he said, “As I said, the conditions looked hopeful. I believe the pandemic is creating greater awareness among all the people in the country that this is the time to make radical changes in the way we do our work. This is the time when we should take steps which must lead to much faster growth of the economy. This means much faster growth of manufacturing.” Exuding confidence that it is possible, Bhargava said, “The first thing is that there has to be a national consensus on the need to grow manufacturing and on the need to create jobs.”
He further said there can be no two opinions on the way to go forward for growing the manufacturing sector and there needs to be national consensus on this.
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“If that happens, the kind of changes that are required becomes much easier. They will happen much faster. So, my approach into this is to say that all of us should understand the changes that are required, to participate and support the government policies, bringing about those changes and make India a more competitive manufacturing country,” he added.
Bhargava said the initial problem with manufacturing growth arose because “we adopted the Soviet policies or they were based on the Soviet policies of economic development. And at that time, these policies looked very attractive to a large part of the world and what we did was consistent to what a lot of people were advocating at that time”. However, he said, “As time passed it was apparent that these policies were not delivering the results. The unfortunate part is that we didn’t change with time. And we persisted with the same set of policies even though they were failing to deliver results.”
“This system of cross-subsidisation appeared very popular. It was really more of populist effort. But in result it led to the cost of production going up and that was one of the factors why we were not competitive because cost of production has to be as low as possible,” said Bhargava.
On the future outlook, Bhargava said, "I have been frequently asked what is the likely prospect of this industry in the future. I am not in a position to answer that with any definite numbers or ideas what will happen.”
He further said, "But I would like to say that the growth of the automobile industry, particularly the car industry, is a very good indicator of the well-being of the people of a country, of the economic health of the nation and how well the country is growing in terms of providing different kinds of benefits to the citizens." Bhargava, however, said the auto industry's growth is entirely dependent on how well the other sectors of the economy perform, how well the people at large prosper and how well the GDP increases.