Why are some countries poor? How do some countries suddenly break out and start growing fast while others are left behind? Why is India not able to match the growth rate of China? These are the questions that everybody wants an answer to. Some of the explanations given in the Indian context is that India's main problems are its poor infrastructure, slow, corrupt and excessive bureaucracy, and India's rigid and myriad labor laws that make firing of employees almost impossible.
But are they really the problems stopping India or is there more to it? For example if infrastructure was holding India back then Gujarat has excellent roads, good ports with excellent connectivity, and stable and reliable power supply. And although Gujarat has done well, lot more industry and manufacturing should have come to Gujarat.
For labor laws there is the option of hiring contract workers as some have already done, although, of course its not a perfect solution. Also today I read an interesting article in ET about similar problem in Japan that seems just as bad as us. With layoffs unthinkable, Japan's workers are sent to the boredom room.
Bureaucratic hurdles are a genuine problem, which hurts us pretty badly. For example just yesterday ET had this article. Its about how despite huge bamboo resources Indian agarbatti makers are forced to import bamboo because of forest regulations and bureaucracy. Similar situation is prevelent for things like coal and iron ore. Despite having large exportable reserves we are importing these things because govt. can't distribute these resources fairly without corruption or bureaucratic delays. Thousands of Megawatts of power plants (both gas and coal based) are lying idle because of coal or gas unavailability. But, in Gujarat there is 'Single Window Clearance Act' with CM himself taking personal interest to speed things up for larger projects. Of course, it's not perfect and for things like environmental clearance you need central government approval.
I think it's just lazy journalism to keep on bandying about Infrastructure or labor laws or bureaucracy. They are genuine problems no doubt, especially the last one, but there are many other factors apart from the combination of these that hold India back. May be we just don't have enough smart, driven, hardworking skilled workers as even the simplest, most labor intensive industries like textile, require few highly skilled workers like designers, engineers etc. Its a fascinating subject and requires proper research.
But are they really the problems stopping India or is there more to it? For example if infrastructure was holding India back then Gujarat has excellent roads, good ports with excellent connectivity, and stable and reliable power supply. And although Gujarat has done well, lot more industry and manufacturing should have come to Gujarat.
For labor laws there is the option of hiring contract workers as some have already done, although, of course its not a perfect solution. Also today I read an interesting article in ET about similar problem in Japan that seems just as bad as us. With layoffs unthinkable, Japan's workers are sent to the boredom room.
Bureaucratic hurdles are a genuine problem, which hurts us pretty badly. For example just yesterday ET had this article. Its about how despite huge bamboo resources Indian agarbatti makers are forced to import bamboo because of forest regulations and bureaucracy. Similar situation is prevelent for things like coal and iron ore. Despite having large exportable reserves we are importing these things because govt. can't distribute these resources fairly without corruption or bureaucratic delays. Thousands of Megawatts of power plants (both gas and coal based) are lying idle because of coal or gas unavailability. But, in Gujarat there is 'Single Window Clearance Act' with CM himself taking personal interest to speed things up for larger projects. Of course, it's not perfect and for things like environmental clearance you need central government approval.
I think it's just lazy journalism to keep on bandying about Infrastructure or labor laws or bureaucracy. They are genuine problems no doubt, especially the last one, but there are many other factors apart from the combination of these that hold India back. May be we just don't have enough smart, driven, hardworking skilled workers as even the simplest, most labor intensive industries like textile, require few highly skilled workers like designers, engineers etc. Its a fascinating subject and requires proper research.
