The next 10-15 years could be difficult years. With the European countries having spent beyond their means, they are now in a financial mess. The wealth creation there had been less than their spend. The US too is needing to implement ‘unpleasant measures’. But, why should this be of consequence for India is the moot question?
This only means the global economy could enter into long-term slow growth or like Japan which has been nearly static for 12 years or so. And, this also means India cannot depend on exports to the US and Europe for its growth. As slowdown will hit, trade barriers may be erected by many countries. This was the opinion of many a speaker at the CII National Quality Summit of the CII in Bangalore on Thursday. Also, the Indian firms need to focus on innovation during the troubled times. It’s a challenge for companies to scale up its marketing and distribution.
In his Inaugural address at the CII National Quality Summit with the theme ‘Creating Brand India through Quality’, Ashok Chawla, Chairman, Competition Commission of India (CCI), said, “It was 1991 with its changes in physical control, trade policies, tax regime and regulatory reforms that was the ‘watershed’ for the Indian economy which led it to its liberalisation and thence to its globalisation.”
He added that deregulated sectors like telecom have far performed those of fertiliser, pharma and sugar which have not yet reached their potential. Devolution of state control to market control led to the evolution of competition, he said. He elaborated how competition policy and law had led to anti-competitive pricing, regulated mergers and acquisitions, and removed barriers to trade. Competitive regulations, he said, while allocating resources optimally had benefited the poor than the well off and had become the fourth pillar of public policy complimenting fiscal, monetary and trade regulations.
B Muthuraman, President, CII & Vice Chairman, Tata Steel Ltd, reflecting on the pre-1991 administered economy days, said that protection only bred poor quality and low profitability. It was the successive reforms which led to improvements. He recalled the quality mission to JUSE (Union of Japanese Scientists & Engineers), having a cascading effect in the Indian industry which made companies more competitive and win various Quality Awards like the Deming Prize. His mantra was that continuous improvement efforts needed to be pursued to be in readiness for economic reforms, which, he said, were bound to follow. “There can be no growth without competitiveness and there can be no competitiveness without quality,” he said. The Quality message however, he felt, was not wide spread and needed to reach the SME sector and not remain confined to large enterprises.
While alluding to the ‘Theory of Constraints’, it was a change in process improvements and not technology that would be the differentiator to improve competitiveness, he said. Quality, he concluded, needed to be taken to every corner of India and suggested that the Institute of Quality spread its reach to carry the quality message all across.
T C A Ranganathan, Chairman and Managing Director, Export-Import Bank of India, noted that India with its skilled leadership would soon be the third most preferred destination and the fourth largest in PPP terms and that Asia and Africa would be the next growth engines of the future. While elaborating on the composition of Indian exports and Imports, in the given turmoil in the western world, he felt that India had the potential to be a large manufacturing hub in the future.
Quality, he felt, was the benchmarking of future expectations and, innovation and improvement of standards would drive it in this quest for brand building. He also commented on the low levels of expenditure on Investment, Innovation and Research & Development in India which was mostly routed through the public sector. Ten countries, he said, conducted nearly 80 per cent of the world’s R&D while the Indian spend on R&D stood at a mere 0.8 per cent of the GDP which was far lower than that of Korea (3.2 per cent) or the USA (1.9 per cent).
