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This is a thread to compare working atmosphere between companies in India and Europe & USA. This will make you understand why most of large Indian companies are setting up manufacturing outside of india and why we have unemployment at its highest in 45 years.
Land cost - in best industrial estates anywhere in US max you will pay 6-7 lac Rs a Acre vs 1 Cr or more in India. The interest cost on land does not justify the project.
Energy cost - In india it’s around 10 Rs a unit vs 1.5-5 Rs in US. The quality of power is awful in India and we have to back up with inverters and generators. This increases breakdown and extra investment. A small company like ours have more than 75L invested for this.
Finance cost -against 9% ROI cost here, these countries have 0-4% max.And it’s available over phone. The bureaucracy and pain one goes through to get loan is a different story.The bank even does not treat you as customer. I have seen them asking me for a car to come to my factory
Ease of doing business - approvals come max in a week and every infrastructure including building is put in place maximum three months in these places. To put it in perspective it took me 5 years to get a factory license just because we don’t bribe.
Skill - our education system makes all of us managers with no skill. There is no emphasis on skill development and hence getting skilled labour is a problem. Also there is no dignity of labour in our social system which demotivates the workforce.
Trust - again our social structure has made us a society of mistrust. The workforce does not trust management. Buyers don’t trust suppliers. This negativity is a big cost in general. Every plant will have so many security people vs none in these countries.
Infrastructure - we have one of the worst infrastructure amongst developed/ developing nations. Work conditions are awful. Most of the industrial areas you visit has bad roads, overflowing sewer, no water.
Labour - Many times cheaper but not efficient. More so these countries have replaced them with automation. A 100 million USD turnover company I visited has just 70 people working. A similar manufacturing will have 500-1000 people in India.
Taxes- average corporates in US pay 20% tax vs 25% here. Further the GST rates are cheap and very simple. It’s just for the end user and there is no system of modvat. At any point of time a small organisation like ours will have 4-5 Cr stuck in GST refunds.
Labour laws - We still have very British old labour laws. Times, technology and processes have changed but not our laws in most of the cases.
Entrepreneurs don’t need subsidies. Some good work environment, culture, respect, infrastructure and policy push is all that’s needed. Govt tries to subsidies their failure which is vicious circle.
If india has to uplift all population, it has to grow at 10% plus. And without manufacturing that’s not possible. Job creation is must. And only private sector investment can make that happen.
I hope the next government works towards that instead of fooling around people in name of religion, caste, history, corruption, stupid politics.These things come into discussion only when economy is not good. No one discusses this when theirs job and work for all.
