Wednesday, June 24, 2015

"Make in India"- Slogan Vs reality

There was a time when world was frowning on Japanese made products for their low quality compared to those from western countries. See how this tiny country, shattered by World War II, became one of the most industrially advanced countries within a span of 25 years after the War. Same thing happened in Korea too, which, through its sheer hard work reached a stage to day when it can stand shoulder to shoulder with Japan, the US and other wealthy countries. How about China? It is another story which is a lesson to aspiring countries like India as it is the second most economically powerful country to day after the US. True there are many reasons to counter argue that India is not like China as we have an over dose of misguided democracy where accountability does not exist at any level, be it top echelons of the power structure or the lowly rated daily worker. Our Prime Minister must be admired, for nothing else, but for his courage of conviction when he coined the famous slogan, "make in India" exhorting the industry to expand their production base to manufacture quality products! Are we realistic in expecting such a thing to happen in our life time?

Quality and reliability are the two pillars on which reputation of products rests. Unfortunately in to day's India both are conspicuous by their scanty presence. The country's infrastructure in monitoring quality is practically non-existent. The quality monitoring agencies, most of them, are highly bureaucratized, resulting in delays and inefficient execution of their duties. There is a shortage of technical skills for which no action is being contemplated though every state is competing with each other to start more and more capitation fee based engineering colleges with doubtful credibility. Look at the land bill controversy which is being played out in the open by the politicians who do not care to be the laughing stock in the international landscape! Farmers whose cause these remorseless politicians are claiming to be championing do not think about the relentless suicides going on in the country side as the farmers are caught between deep sea and the devil! Their land, many of them too small to be viable, cannot bring them adequate returns, pushing them deep into debt burden while selling their land to buy more time is not allowed under the existing laws. Talking of entrepreneurs, there are many serious aspirants with high hopes who want to start new industries but where will they go for getting the wherewithal to venture into manufacturing arena? Bureaucrats, financial institutions, technology agencies and industry promotional departments of the government just pay lip sympathy without raising a finger to help them out. Sorry situation indeed.

Coming to food industry sector, will any serious entrepreneur venture into this area after the recent foolish move by the government to penalize one of the most reputed global companies without giving them even an hearing before taking such a severe penal action? The food safety and quality system is in shambles with bureaucrats running the show and the state machinery supposed to "control" the industry is archival and under functioning or malfunctioning. How can we swallow the bitter truth that 16 of the 30 states do not have even a single food testing laboratory? The judiciary in the country and the money chasing, irresponsible lawyers espousing the cause of food fraudsters, have contributed to this mess by causing inordinate delays in clearing thousands of cases, many of them 10-20 years old. Food Parks and similar grand sounding schemes have not borne any fruit till now though hundreds of crores of rupees have been spent on them. Food exports from India are grievously hurt because of the callousness, dubiousness and recklessness of the manufacturers and exporters. Look at the recent ban of import of snacks from India by the US because of quality and safety considerations and it is a pity that a major exporter claims that Indian laws under which they manufactured the products are different causing rejection! How naive and frivolous such an argument can be!  

Here is a telling commentary on the present sorry state of affairs in the country vis-a-vis the manufacturing sector which self revealing:    

"While authorities are now making an example out of Maggi, it's hard to believe that this is the only consumer product in India that fails to meet safety norms. In fact, a 2015 report by the Food Safety and Standards Authority of India, the national food regulator, revealed that almost a fifth of all food samples tested were adulterated or mislabeled. In 2012, a government study revealed that over 68 percent of milk sampled was adulterated with potentially harmful additives such as detergents, hydrogen peroxide, and even urea.
While some commentators in India tend to blame foreign multinationals for producing lower-quality goods for Indian consumption, even when this claim turns out to be true, the real fault lies with Indian authorities. With a patchwork quilt composed of a central regulator and an array of state government regulators, many of which are woefully understaffed, it's a miracle that this system finds any product quality lapses at all. In such an environment, it's hard to see how Prime Minister Narendra Modi's grand "Make in India" initiative to turn the country into a global manufacturing powerhouse can possibly come to fruition. India is not yet a major exporter of manufactured food products, but it does export its generic pharmaceutical products to over 200 countries. Could a Maggi-style disaster be awaiting the Indian drug industry?
If you believe the results of a 2014 academic study by a team of researchers from the University of Maryland, the University of Ottawa, and the American Enterprise Institute, a conservative Washington, D.C., think tank, the answer could well be yes. The researchers tested samples of antibiotic and tuberculosis drugs labeled "made in India" and sold in India, Africa, and other non-African middle-income countries. They found that 10.9 percent of the products were of poor quality — that is, they either contained none or less than the required dosage of active pharmaceutical ingredients. Of this 10.9 percent, 7 percent contained less than the required dosage of active ingredients, while 3.9 percent were duds without any of the necessary active ingredients. Drugs without or with less than the required pharmaceutical ingredients will be ineffective, and therefore potentially harmful since they won't treat the condition they're meant to address.
What's more, poor-quality drugs were more likely to show up in Africa than in India or other middle-income markets. While some of this difference could be due to counterfeit drugs and poor storage conditions, the authors of the study claim that a more plausible explanation is that Indian companies are directing lower-quality drugs to the African market. Roger Bate, one of the researchers on the drug study, believes that Indian drugmakers or their distributors are deliberately doing this since regulation in African markets is even looser and laxer than it is in India. For those who claim that Western multinationals are producing lower-quality products for India, the shoe might be on the other foot. Meanwhile, U.S. regulators are poised to keep Indian drugmakers on a tight leash. In May 2013, Ranbaxy Laboratories Ltd., a major Indian drug company,pleaded guilty to seven felony charges and paid a $500 million fine for fabricating data, committing fraud, and selling adulterated drugs in the U.S. market. Regulation may be at the heart of the issue. India's national drugs regulator, the Central Drugs Standard Control Organization, has a staff of a little more than 300 employees, or about 2 percent the size of the U.S. Food and Drug Administration (FDA). What's more, it only has authority over newer drugs; pharmaceuticals that have been on the market for over four years are under the regulatory jurisdiction of state-level regulators, who are understaffed and, in some cases, corrupt.
Low-cost Indian generics also continue to draw the ire of advanced economies like Canada, whose socialized medical system is trying to cut costs by importing cheaper drugs from India. Currently, some 5 percent of generic prescriptions in Canada are filled by drugs made in India. Meanwhile, in the United States, a whopping 40 percent of over-the-counter and generic drugs consumed are made by India's pharmaceutical companies."

What has been said about pharma products is true with respect to food products also. Can we be serious in bringing about a drastic change for the better and take actions, many of them painful, to streamline the food processing sector through scientifically sound, financially supportive, entrepreneur motivating, technically supporting, land acquisition facilitating and venture promotion policies without wasting more time on political chicanery? Being one of the top producers of many food materials like cereals, milk, fruits and vegetables, plantation crops, meat , poultry and fish, why can't we take up a massive program of establishing thousands of food processing units across the country with least bureaucratic hassle? Then only Indian can really claim that it is the food basket of the world.