India Revives an Old Plan for New Growth

Discussion in 'Economy & Infrastructure' started by RAM, Nov 27, 2010.

  1. RAM

    RAM The southern Man Senior Member

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    India is reviving a system it pioneered 45 years ago by offering companies tax breaks and better infrastructure in designated zones



    http://www.businessweek.com/magazine/content/10_49/b4206016219076.htm
     
    Last edited: Nov 27, 2010
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  3. tarunraju

    tarunraju Moderator Moderator

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    In other words, "India is acquiring precious land from farmers at taxpayers' expense, and giving it away to companies for peanuts (and kickbacks to the babus), companies which will anyway use dirty books to evade tax".
     
    Last edited: Nov 27, 2010
  4. Yusuf

    Yusuf GUARDIAN Administrator

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    About time that we do this. This thread comes at a time i am in sri lanka looking for business ops and i see that the chinese are all over the place. Every God damn thing is chinese. The people i spoke with said they used to buy from india once upon a time but now its just not possible as the prices quoted by indian companies just do not match with chinese. That said, there is more to it than just SEZ establishment. What about red tape that never goes. My cousin who wanted land in an industrial area in karnataka, not even an SEZ paid a 25L bribe to the person in charge. How will manufacturing ever succeed in india to take on the chinese? The customs people who take a cut even on exports!!! All this adds to the cost. How can we be competitive? Govt needs to have a very deep look into how it is actually a stumbling block for indian manufacturing than being of any help. It has to redress this only then will india go up the ladder. The potential has always been there but not allowed to bloom. Its time we did.
     
  5. pankaj nema

    pankaj nema Senior Member Senior Member

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    It is just that old Export promotion Zones

    Now it is called free trade zones with customs excise and banking facilities inside the zone .

    However for exports to rise consistently you need to create infrastructure like assured low cost electricity which is always the biggest headache

    Just demarcating a few hundred hectares as free trade zones alone wont help

    Most export cargo is hauled by railways in containers to ports like JNPT kandla and Chennai etc
    So for costs to be kept in check all EPZ will have to be 100 km either side of the track

    The Delhi Mumbai Industrial corridor will see a number of small cities on either side, which will be mostly export oriented
     
  6. badguy2000

    badguy2000 Respected Member Senior Member

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    well, to build a zone is not so magical that Indian's manufacturing can prosper.

    Before Indian's manufacturing can prosper, India still have take decades to raise the literacy rate and work ethnics of its labours,fix up its industry chains,improve the infrastructures and cut off its bureaucracy and corruption of its governments.

    I find that many indians tend to look for magic shortcuts to seek sucecess without pains and hard work. to build zone is just one of many "shortcuts" seeked by many indians.

    In fact, there is no such shortcut without pains and hardwork in the world.
     
    Last edited: Nov 27, 2010
  7. Rage

    Rage DFI TEAM Stars and Ambassadors

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    A few things:

    India's literacy rate is presently close to 80%, which official figures will not reflect because of the lack of a decade-long census. With such a large pool of labour, that is more than enough to suffice for any manufacturing endeavour.

    Low cost, unskilled manufacturing does not require an "educated" workforce.

    Indians work longer and harder than most people, including perhaps the Chinese. Most people work on weekends, and 'regular' labour hours, especially for menial workers are regularly flouted. That is not reflected in your knowledge ofcourse, because you rely upon documentaries and 'news articles' about labour unrest for it. And have never seen actual Indians or Chinese at work. Chinese labour unrest was massive in the 1980's, a fact not reflected in news articles ofcourse because of control over the media. Take a course in Chinese economic history.

    India's industry chain, despite its relative infancy, works remarkably well. The one major exception is the 'industry' chain for grain produce.

    India cannot build up its poor infrastructure overnight, not least because of population density, rules and strictures and the political environment. In consequence, it has to build these "islands" of prosperity, and hope that the spinoff effects, many of which already have, will trickle down.
     
    Last edited: Nov 27, 2010
  8. pankaj nema

    pankaj nema Senior Member Senior Member

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    bad guy thanks for your advice but you NEED NOT POKE your nose in every thing.

    we are aware of what it takes to succeed but we JUST cant use chinese methods of extremely LOW WAGES TO boost exports

    A communist state like you has used slave labour to increase its exports rapidly
     
  9. Ray

    Ray The Chairman Defence Professionals Moderator

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    Should we adopt the Chinese methods of ensuring that the land required for industry and infrastructure is obtained without the usual protestation and obstruction that we encounter in India?

    Maybe, democracy is not the sure shot way to success when in an hell fired hurry.

    I hope some Chinese poster would enlighten us as to the process how they acquire land, are their protests and if so, how is it resolved and if there are no protests, then do people just give away their ancestral lands that sustained them without a whimper, then,the procedure how they process the applications and the considerations thereof and then how they keep the cost of manufacture low and what they pay their labour. Maybe a touch on the cost of living would help.

    There is no doubt that China and its ways of governance is indeed fascinating!
     
    Last edited: Nov 27, 2010
  10. badguy2000

    badguy2000 Respected Member Senior Member

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    well, there happens to be one example how CHinese government acquire land for urban plans.

    the old house where my parents live happens to be demolished, according to the urbanplan. I have discusss how the compensation is on in the following post. it can tell you how CHinese system works.

    http://www.defenceforum.in/forum/showthread.php?t=16475&page=3

    the government's land-acquiring system in CHina is not perfect and lots of unfair cases happens very year. that is why soo many pieces of news about protests against land-acquring from the government are reported!

    However, IMO,Chinese current land-acurqing system is postive to the country as a whole.
     
    Last edited: Nov 27, 2010
  11. badguy2000

    badguy2000 Respected Member Senior Member

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    BTW, Chinese local government tends to buy land on outdated avenues or land from farmers at a low price, then “upgrade" the acquired land by building enough roads,electricity-supply,running-water and formating the land.


    the "upgrade" of the acqured land costs Chinese government some money.but the government can sell the "upgraded acquired land" at a much higher price and earn a big buck.
    with the money earned from the land-acution, Chinese government can buy more land ,"upgrade" more land and earn more money by auctioning more "upgraded land". that is how the loop goes on!

    According to CHinese current status quo, before "upgraded" by CHinese government, the land usually is quite cheap . In fact, in most cases, without the "upgrade" from the government, the land price would be even lower than the compensation from the government.

    So, in most cases, the land-acquiring and "land-upgading" is win-win deal to both the government and the owners of land.
     
    Last edited: Nov 27, 2010
  12. Yusuf

    Yusuf GUARDIAN Administrator

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    No you are wrong. We are not looking for magic but yes we are looking for basic government support to help India go up the manufacturing pie of the world. In your entire post you are right only about bureaucracy and govt corruption and that in fact is the main reason as i pointed out in my earlier post.

    Apart from that literacy is not of very big consequence when entire labor force in the manufacturing sector is concerned. Not everyone has to be an engineer and not everyone has to be a high school grad also at every level. Same is the case in China too. When i visited Chinese factories i found nothing but robots who just did what they were taught over and over again like robots. They didnt come across as very literate. Same is the case in India. That apart India has quite a lot of engineers and more that many go abroad to find jobs.

    Indian infrastructure is way better than what you think it is. Though not up to western standards or even Chinese, but its not like we have mud unpaved roads and no ports, no electricity etc. India has a infra development plan of up to a trillion dollars in the next 5 or so years. All major highways of India are as good as Chinas. I can tell you this as i travel a lot by road all over the place. All roads are tolled roads and are maintained very well.

    Ports and air ports are getting upgraded or are have already been done. Every city in India right now has metro trains being built or in the process of finalizing one for their cities and this includes tier II and III cities.

    You have the wrong notion that we are waiting for a magic wand to be waved or looking for short cuts. What we are looking for is the kind of support the Chinese govt gives to its manufacturing and other sectors which the Indian govt does not.
     
  13. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    GOI must pass land regulation act on lines haryan government which pays handsome dividend in return of land surrender why its waiting to get green signal from mamata banerjee
     
  14. badguy2000

    badguy2000 Respected Member Senior Member

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    well, you are quite wrong here. educaiton is important to any class.

    CHina's total literacy rate is 90%+. Among youth, the literacy rate might be almost 100%.

    Besides, northeast confucian countries ( CHina, Japan, Korea and Vietnam) all extremely attach importance to education,so it is not occasional that those countries grow fastest in the world.
     
  15. badguy2000

    badguy2000 Respected Member Senior Member

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    China has been centerialized state for 2000+ years and Chinese center government always has absolute authority over local government. Under currency system, CPC has absolute authority among CHinese center government.

    unless India were to carry out a through reform of its political structures and insitituion, it would be impossible that Indian government provide support as Chinese government does.
     
  16. Yusuf

    Yusuf GUARDIAN Administrator

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    You live under one party system with no political compulsion. India has a federal structure of govt where individual state formed on the basis of language has to be considered. That is not bad though. What is, is the corruption and how it political gain ot loss overrides any development agenda. That was the case in Bihar where for years caste matters till the last govt did some good work and development became the agenda and the govt just got voted back to power.

    Political will and some focussed development agenda is what is required. Indias growth probably will not be as spectacular as Chinas was because of Chinas system, but the chinese system can blow up. India being a democracy has its checks and balances. It will go a little slower but will surely be more stable. Like i said before, political will and cutting down on corruption will do the trick.
     
  17. Vinod2070

    Vinod2070 मध्यस्थ Stars and Ambassadors

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    The land laws in this country are in major need of reform. This is the last refuse of very scoundrel in this country, the parking lot of most of the black money.

    Once we succeed in making the land market transparent and a fair process of land acquisition, nothing can stop India from becoming the fastest growing economy.
     

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