Former Prime Minister of India - Shri Atal Bihari Vajpayee

PM's speech at the ”We Think for India” function

~I am happy to give away the awards for the first ~We Think for India~ All-India Competition. The WTI initiative is an innovative approach to engaging qualified professionals outside the Government who are unconnected with interest groups, in generating forward looking ideas in key areas of policy-making.

I appreciate the efforts of the distinguished citizens who have taken this initiative.

I must say that you have given your organization a catchy and thought-provoking name – WE THINK FOR INDIA. But I have a word of caution! It is a name that you cannot claim exclusively for yourselves under some kind of intellectual property law. Rather, I am sure that you would like more and more our countrymen to join you in saying, ~We Think for India~.

I congratulate you for preparing the ~National Manufacturing Sector Policy~. It is especially praiseworthy that the draft has been prepared through an All India Competition, in which a large number of prestigious institutions participated.

The choice of theme is entirely appropriate. In recent years, an impression had gained ground that India was not a good base for manufacturing. This was perhaps because our country had proved its capability in the services sectors, particularly those based on sophisticated skills and knowledge. This impression was strengthened by the fact that, during the decades of the 1980s and 1990s, there was a clear differential in sectoral growth rates between manufacturing and services, in favour of the services.

Several reasons were advanced for our supposed lack of competence in manufacturing. These ranged from unnecessary and convoluted bureaucratic procedures, excessive and inappropriate regulation, rigid labour laws, inadequate investment in infrastructure, and lack of a work culture conducive to manufacturing.

However, all this is changing. We have taken decisive steps to address all these challenges. Last year, the manufacturing sector grew at 6.1 percent, well above the historical rates for this sector. The buoyancy was particularly evident in the capital goods and consumer non-durables sub-sectors.

This testifies both to an improved investment climate and increasing consumer confidence. Macroeconomic factors, in particular low inflation and fall in real interest rates have also helped.

In the current year’s budget, we have taken a number of measures to address the challenges in the textiles sector, which has immense employment potential. This sector will have significant opportunities for growth post 2005, following the phase-out of the multifibre agreement. We hope that our textile industry will be responsive to this opportunity, and take full advantage of the measures set forth in the budget.

We will similarly seek to address the policy and institutional barriers, which still impede growth in manufacturing. Among these, the food processing industries and small-scale industries need particular attention. We are in the final stages of formulating an integrated Food Law, which will replace the myriad laws and regulations related to food.

We hope that this law would help accelerate the growth of the food processing industry. It would also create demand for agricultural produce, and stimulate crop diversification.

We are also considering ways of enhancing access of the small scale sector to institutional finance. We want to enable them to upgrade technology and capital stock, thus graduating to higher levels of output and better margins. This will help them to respond to the challenge of reduction in SSI reservations.

I commend the emphasis in your policy paper on the need for India to move from low-value exports to high-value exports, and from low-tech exports to high-tech exports. It is obvious that our educational system, especially higher and professional education, will have to gear up to support this strategy.

The policy paper displays in-depth professional knowledge, considerable imagination in identifying solutions to perceived problems, and awareness of the challenges of technological change that lie ahead. I congratulate the winners – IIT Chennai, IIM Lucknow, and the Anderson Consulting Group. I also commend others who participated in the competition. The ideas expressed in the entries will be a rich source of policy options for enhancing our global competitiveness in manufacturing.

I hope that your think tank will think of more such useful initiatives in the future, and also inspire more people to think of India.

Thank you.~