Make In India - How to make it a reality... Suggestions

'Make In India' is  a very catchy slogan, with appeals all around. Since the word has been 'politicized' it has developed many hues and many are involved in the discussions. It is fair to say that there are genuine discussions and otherwise. Under otherwise, I would classify, interests of corporates, to see an opportunity to grow and capture value for their key stake holders, the share holders.

In this context, an interesting article by Mr. Josy Joseph titled 'For now Make In India is a mere Slogan', is timely. There are valid questions raised and opinions in this piece.

For me, a professional who has been in the industry and observing the 'Defence Procurement' as an option to diversify and scale business for the vertical I am involved in, had never escaped my attention, till I made a failed attempt.

It takes, phenomenal mental strength, very deep pockets and well established 'network' to enter the corridors of ' Defense Procurement'. Starting with specifying the requirement and inviting 'Expression of Interest' to 'Request for Qualification' to 'Request for Proposal' to  award, may take years.

To scale up involvement of Indian manufacturers in this process, (I am deliberately not using corporates for the tag of crony capitalism is unfortunately tagged to them, though I tend to disagree), it is essential that the procurement process needs to be thoroughly recast. A significant mind set change is also needed in  the administration of contracts.

Here are my suggestions:

1. Instead of 'Inviting' tenders or 'Expression of Interests', government should encourage grass root growth of the industry. For this initial set of resources (including funds) could be identified through committed groups, organisations or corporates. 
2. These groups shall be encouraged to work in clusters and an organisation shall be mandated to provide the initial set of resources, like seed capital, high technology labs, basic ready quality infrastructure and so on so forth. 
3. This organisation shall also be mandated to develop from drawing board stage components and products and involve competent firms from these clusters for  development of cutting edge products.

One can go on and on - but I am sure there are enough reports and studies which will throw multiple options and guidance for incubation of such clusters.

Another area which needs reform is the 'DEFAULT by government departments in honouring their commitments of the contract.

Today it is the norm to de risk the government from everything and pass it on to the other side. Arguments typically heard in such discussions are - "if you do not know why do you come for this?"

The fact is the risk which is passed on by government is unknown to them as well. Classic example of this is the management of 'Right of Way', which the law enforcing agencies are not able to acquire but private agencies are expected to!  

So there has to be a change of mind set and a participative approach has to be built in. 

Another extreme case is the withholding of funds and extracting guarantees. Today to do business with any governmental organisations means that you are required to leverage your balance sheet significantly and seek bankers support to furnish the multiple guarantees for possible liabilities, which may emerge out of the risks which I highlighted above - unknown to both sides but government is not liable! We hear many cases of invoking of Bank Guarantees in the industry that I am surprised there is no thinking on the part of government to look at the reasons for such large failure and identifying possible systemic flaws, which need to be corrected. 

This has to be the another major area of reform if we have to 'Make In India' successful.