4 Editorial THE ECHO OF INDIA�PORT BLAIR

Thursday�December 21, 2017

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When you go into court you areWhen you go into court you areWhen you go into court you areWhen you go into court you areWhen you go into court you areputting your fate into the hands ofputting your fate into the hands ofputting your fate into the hands ofputting your fate into the hands ofputting your fate into the hands oftwelve people who weren't smarttwelve people who weren't smarttwelve people who weren't smarttwelve people who weren't smarttwelve people who weren't smartenough to get out of jury dutyenough to get out of jury dutyenough to get out of jury dutyenough to get out of jury dutyenough to get out of jury duty

NNNNNorm Crorm Crorm Crorm Crorm Crooooosbysbysbysbysby

Factors favouring Make-in-India conceptREFLEX ACTION

The bounce back in the share of manufacturing in secondquarter GDP in 2017-18 unleashed a fresh impetus to theMake in India initiative, which remained tardy in the postdemonetization period. The manufacturing sector growthresurged to 7.0 per cent, nearly to the previous year’s level,after a sharp drop to 1.2 percent in the first quarter of 2017-18. This shows that the impact of demonetization was ashort term effect.

Today, the Indian economy is globally integrated. It hasbecome one of the important engines for global growth. Tothis end, polarization of Make in India on sectoral growthand labour intensive industries is not the panacea forsuccess. Integration of manufacturing through the globalvalue chain (GVC) had become vital for Make in India.Firms in developed countries combined their high techknowhow with lower wage labour in developing countriesto produce their goods at lower costs. Eventually,production has become increasingly fragmented throughthe growing prevalence of GVC, with production ofcomponents across the borders. South East and East Asia,especially, exemplified this new pattern of production. Inthis process of GVC value added manufacturing, many ofthe developing countries, such as China Vietnam, Thailand,Bangladesh, Mexico and other South East Asian countries,have benefitted by sharing labour intensive productionwith low cost for the developed nations . But India trailedbehind in this race. Reasons: there were limitation of scale,difficulty in accessing cheap credit and lack of adequateskilled labour. These economic ills shadowed India’spotential as a manufacturing exporter and becamedetrimental for it to enter the GVC network ofmanufacturing.

Given the new wave of manufacturing in the world andIndia’s growth being globally integrated, sectoraldevelopment and labour intensive industries are not theonly catalysts for the Make in India success. Technologyupgradation and skilled manpower are imperative forIndia to become party to GVC manufacturing network.Even though the country’s manufacturing landscape hasmade transformational change from traditional to modernindustries, such as automobile and electronics, whichresulted in traditional labour intensive industries being

outstripped by technology base industries, the changes areyet to make India potent for GVC network formanufacturing, like Vietnam and other South East Asiancountries. This is despite the fact that India is alreadyengaged in multilateral FTA with ASEAN and bilateralFTAs with Malaysia and Thailand.

Success of GVC value added manufacturing networkdepends on how the component makers, dubbed“supporting industries”, function efficiently to upgradetechnology, which is required for the assemblers. To cutcosts and re-enter competitiveness, Toyota Motor Company,after the Japanese currency yen appreciated, adopted theGVC system of manufacturing to produce their Asian carmodels. It set up a five-country network for auto partproduction in four ASEAN countries and India. Productionfacilities for diesel engine, press parts and axle were set upin Thailand, manual transmission (middle type) inPhilippines, engine computer in Malaysia, gasoline engineand door lock in Indonesia and manual transmission (largetype) in India. In this current trend of global production,how should India’s manufacturing landscape fit in if Makein India vows for a success? India’s manufacturing sectorneeds to be divided into two parts. The first part shouldinclude development of natural resource based industries,such as agro-based, textile, mining and metal industries.The second part can cover component-based industries,such as automobile, electronic and digitization. It is thesecond part where GVC value added manufacturing willwork well.

India can be the manufacturing hub for component andparts in GVC production network, which are labourintensive, for the developed nations. Factors which go infavour of India are India’s demographic dividend and edgein low cost manufacturing competitiveness over South East

Rahul takes chargeof Congress

Rahul Gandhi has taken charge of India’sGrand Old Party from his mother who pilotedit through turbulent times and could restoresome of the glory it had lost since the mid-1990s. Whether Sonia Gandhi will completelyretire from politics as she has said she will oragree to remain as the party’s eminence griseremains to be seen. One thing is for sure.Leaders of other Opposition parties have animplicit trust in her and in her ability to leada coalition. As the new leader of the party,Rahul’s first challenge will be thereinvigoration of the organization, infusionof young blood at all levels and restoring faithin itself. For quite some years, the Congresshas been losing election after election in Stateafter State. Rahul has to reverse the tide.

The force he will be up against is a forcewhich has little respect for the values andnorms of democracy and democraticinstitutions, a force that believes in meting outsummary justice to anyone it perceives asguilty and in transforming our polityfundamentally. This is a political challengeand has to be met politically. If the majority ofthe people still have faith in the charisma andability of those who are in power to deliver inspite of all their omissions and commissions,then it calls for a rational answer why it is so.Why is it that a small but extremely well-organized g roup of people driven by anauthoritarian ideology is undermining theconstitution and the constitutional bodies,trying to rewrite history without evoking anystrong protest from the people.

Strengthening the Congress today hasbecome synonymous with strengthening thedemocratic and secular polity of India. Thepolitical discourse has touched a new low inwhich anyone, howsoever respectable andirreproachable, can be subjected to systematiccalumniation and defamation at the drop of ahat. In meeting this challenge Rahul has toguard the party against relapsing into thesame type of corruption and power-brokeringas has been the cause of its downfall. Thedownfall of the Congress began when theparty chose to cut itself from its traditionalNehruvian moorings and from being a pro-poor party chose to become a party thatpromoted crony capitalism. The Congressunder Rahul has to familiarize the footsoldiers of the party with its history, traditionand values and thus prepare them to face thedaunting challenge facing them and thecountry.

and East Asia countries. However, one of the importantheadwinds for low cost manufacturing In India is the lackof skill development.

It is an important factor to make a nation potent for GVCmanufacturing network. India is yet to ramp up its bottomdown skilled workforce. Only 2 percent of the workforceis skilled in India, compared to 40 percent in China. Thereason for abysmally low skill development is that formaleducation does not impart suitable skills to makecandidates viable for employment. The ITIs – governmentrun training institutes -- are either poorly managed oroutdated. In China, skill development is geared up bysteering secondary schools students into formal skilltraining programme. Given the Indian economy’sintegration into the global economy, which depends onadvancement of technology, Make in India warrants theSupporting Industry model, which Vietnam adopted fortheir success in industrial growth.

Supporting industries are a group of manufacturingindustries that supply parts and components or processthem for the assemblers, such as automobile, electronicsand precision equipment. Supporting industry is low cost,capital intensive and high labour intensive with high –skilled labour. In Vietnam, Supporting Industry proved tobe a boon to the growth of automobile and electronicindustries The country has achieved 90 percent localizationin manufacturing motorbikes. Vietnam is the secondbiggest manufacturer of motorbikes in ASEAN. Electronicexports from Vietnam are ten times more than India’s.Electronic is a Support base industry. Manufacturing ofmobile phones and electronic components is low capitaland high labour intensive industries. There are severalfactors which favour India as a better destination for mobilephone and electronic component manufacturing. Cheapwages and low land cost can prove propitious for thedevelopment of component and parts for mobile and otherelectronic equipment manufacturing in the GVC networkof manufacturing.

India is moving towards digitization. To this end, theGVC network of manufacturing will work well. Accordingto Morgan Stanley, digitization and Smart City will boostthe country’s GDP growth in 2026-27. (IPA)

A visitor looks at the marble statue of Acis at the Louvre Abu Dhabi in Abu Dhabi, UAE---REUTERS

DISCLAIMERThe views in the articles published here are absolutelythe views of the author and The Echo of India does notstand liable for them.

Subrata Majumder

King of good times cites biscuitking’s fate to fight extradition

But the Biscuit King was buyingcompanies “with debt” and it wasonly a matter of time before thecookie crumbled. The New YorkTimes described Rajan Pillai as“one of Asia’s most flamboyantbusinessmen” and that “at thepeak of his powers, Mr. Pillai ranBritannia Biscuits, a large makerof cookies, but lately he had beena fugitive from Singapore. He hadbeen indicted there, accused offraud amounting to millions ofdollars.”

So it happened, in 1993! Somenervous Shylock, afraid that hemight lose his pound of flesh,snitched to the authorities andSingapore ordered an enquiry.The Biscuit King was caught in themesh of his own creation and wasall set to be sentenced for up to 14years in jail. But the ‘Son of theCashew Trader’ gave Singaporethe slip and arrived in Kerala –where he was born in 1947, theyear India gained Independence– in a blaze of publicity. There wasan Interpol Alert but he rode that

FOCUSlittle trouble with a stay fromcourt. And then he made a mistake.He went to Delhi and his luck ranout. He was arrested from the HotelLe Meridian. The Delhi Police tookhim to Tihar Jail after a magistraterejected his plea for medicaltreatment. The magistrate saidPillai was faking illness to seek“asylum” at the hospital. Prison wasbad for the Biscuit King. The cookiecrumbled and his flamboyancewent to desperation.

One day he just collapsed. And“one of Asia’s most flamboyantbusinessmen” died in the corridorof a Delhi hospital, unattendedand alone. He was 47. He was“suffering from bleeding cirrhosisof the liver” for which notreatment was available in Tihar.

The circumstances of Pillai’sdeath and the ruckus created byhis wife forced the authorities toinstitute the Justice Leila SethInquiry Commission. The resultwas a scrutiny of the Indian prisonsystem. Justice Seth looked into the“circumstances and sequence of

events” that led to Rajan’s death.Mallya will be thrilled to know thatJustice Seth found evidence thatsuggested Pillai “met his end in theface of apathy and negligence.”There was gross human andprisoner’s violations. The enquiryestablished that even after beinginstructed that in case of a medicalemergency, Pillai should be rushedto GB Pant Hospital or AIIMS, hewas packed off to Deen DayalUpadhyaya Hospital.

Another incriminating lapsewas the failure to carry out themandatory medical check-up ofPillai at the time of his admissioninto the prison population. It wasalso found that Nina Pillai’sallegation that Rajan Pillai wastortured was not far from the mark.

One of the inmates, RajendraKumar, witnessed then Tihar JailSuperintendent AK Singla beatPillai in his office on July 4, 1995.

“Deputy SuperintendentsMahabir Singh and Bacha Majhiheld the visibly ill tycoon whowas the bleeding from the mouth,”Avirook Sen quoted Kumar inLitany of Negligence in IndiaToday. “When he (Singla) saw I hadentered the room, he slapped meand threatened me to have mekilled if I said a word about whatI had seen.” The next day (July 5,1995) Rajan told Kumar that theJail Superintendent AK Singlahad demanded a Maruti 1000 carand Rs 5 lakh in cash to bedelivered to him within 24 hours.

Following the enquiry a few

Adam bin Mohammad

Rajan Pillai was left to die in cell without medicine, carejail reforms were ordered. Mostimportant the number of doctors atTihar was increased several fold.‘Torture’ was prevalent in the jailwas proved. Some prisoners spokeout. Others refused for fear ofreprisal. Some heads rolled.

Now, decades later – as Indiafights to bring to justice one of themost brazen wilful defaulters ofModern India, the ‘King of GoodTimes’ – the focus is once again onthe Indian prison system. TheGovernment of India has told theBritish court that Vijay Mallya willbe lodged in Arthur Road Jail inMumbai and that his safety andwelfare are ensured. ClareMontgomery has taken theassurance with a sack of salt.

Jail reforms are imperative ifcrooks like Vijay Mallya, who lootthe country and flee to foreignshores, have to be brought to book.No country worth its prisons willextradite fugitives to India’s lousyjails. Rajan Pillai’s death incustody will then have been invain. (IPA/Concluded)