This refers to the report entitled Vajpayee vows to shield SSIs from multinationals (BS, December 22). The thesis of globalisation juxtaposed by its antithesis of swadeshi will sooner or later have to be resolved with a synthesis. Even Dr Murli Manohar Joshi, the champion of swadeshi, has said that foreign computer chips are welcome but not potato chips.
Fair enough, but the BJP will have to identify all the items that need not be indigenous and those that must be. Choosing these item by item is impractical. Therefore, the issue should be classified sectorwise as well as sizewise. There is little controversy about the primary and the quaduarcy (leisure and entertainment) sectors.
The tertiary sector is dominated by nationalised banks and insurance companies. Unless they are subjected to competition, they would be a drag on the economy. That leaves the secondary sector. India was late in her industrial revolution. The country should not now expect to catch up industrially with the First World. India should concentrate its energies on the first, fourth, as well as the computer services, sectors.
To protect its own entrepreneurs about whom Mr Vajpayee has spoken, a medium scale sector needs to be recognised. The capital of such companies should not exceed Rs 10 crore and its plant and machinery no more than Rs 20 crore. All the shareholders should be individuals so that the large industrial houses do not come in. This sector should be exempt from indirect taxes and be outside the purview of the Industrial Disputes Act. This would enable it to go in for labour intensive manufacturing processes and yet be competitive against the larger companies who could freely be Indian or multinational.
