Support to making telecom products good in the short run
The Union Cabinet on Wednesday launched a scheme to support investment in telecom networking products, which China and Taiwan are better known for, to attract foreign and local investors. The move is part of a larger scheme to promote Make in India by incentivising investment in some 10 sectors some of them sunrise sectors like telecom and solar energy where India has aspirations of becoming a leading player, others like automotive and pharmaceuticals where we already have a strong foothold, and a few more that were dying out but we wish to save, like textiles.
While the idea of incentivising investment is laudable given the destruction of industry due to the pandemic, we have to remember that such schemes by nature must be temporary. Prolonged help to infant or sick industries does not help make them more competitive, but only condemns them into white elephants benefiting just a handful of businessmen who pocket state dole to make outdated products. One must also remember that incentives to a few sectors act as a tax on the rest of the economy.
Moreover, mere investments in factories for new technology products cannot propel any nation to the forefront. Technological obsolesce in sunrise sectors is an issue that industrialists in even the most advanced economies have to face. The only way to stay ahead is to commit to Research in India along with Make in India. To depend on fickle transnationals to bring their latest research only to Indian shores and not to rivals where costs may be lower or incentives higher is to expect too much.
We have seen how industry can move quickly. In the last century itself, textiles manufacturing has moved from Europe to India and China to nimbler players like Vietnam, Cambodia and Bangladesh. In the 1980s, Sam Pitroda set up the autonomous Centre for Development of Telematics. It did some pioneering work in researching telecom products before we started ignoring the body and let it sink into a morass. If we wish to stay ahead, we will have to give birth to many such centres and continue funding them for many years. We have to always remember that a nation that under-funds research can never be a true industrial leader.