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Reducing Transaction Costs Key to Make in India's Success: MP Chief Secretary

Team Inclusion

India should aim at reducing the transaction costs in its Make in India programme because it would not make much sense to create cheaper goods because the labour costs are cheaper, suggested Anthony De Sa, Chief Secretary, government of Madhya Pradesh, while speaking the concluding day of the 39th Skoch Summit here on Saturday.

Addressing a power panel discussion on ‘Participatory Democracy: Use of Technology and Challenge of Digital India’, he said high transaction costs been the bane of India’s manufacturing sector. It’s very hard to match the incentives China and Taiwan give to their electronics and IT hardware industries. Of course, India has the advantage of a cheap labour pool, but it’s not sustainable to rely on this factor on the long-term. Creating an enabling environment for our industries to manufacture globally competitive products is crucial. Lower transaction costs are one component of the enabling environment, De Sa explained.

He said Madhya Pradesh has taken Make in India very seriously. The state fast-track innovation projects through Swiss challenge,” he added.  There could be many innovative projects and proposals in various sectors, which are not conceived by the government. For such cases, the government intends to provide opportunity to the private and public sector participants to envisage an innovative project and submit the project report for consideration. These innovative projects are assessed and implemented through the Swiss Challenge Method, he added.

A Swiss challenge is a form of public procurement that requires a government agency that has got an unsolicited bid for a public project or services to be provided to government, to publish the bid and invite third parties to match or exceed it.

Tanmoy Chakrabarty, VP & Head – Global Government Industry Group, TCS Ltd, said clear vision statements have been made and audacious tasks are being set for Digital India, but the challenge is at the deployment, executive and delivery of quality services through the platform. “Now is the need to walk the talk. IT is a panacea for all ills, but it can be a catalyst to solve our problems. IT and e-governance are individualised now; they need to be institutionalized,” he added.

Neelam Dhawan, Managing Director, HP India, said Made in India would remain a slogan unless we take the right action. It’s far easier to bring cheaper exports from China than make them in India itself. That’s the dilemma India faces, she added. Similarly, she said, Digital India can’t happen unless digitation of India happens, which is not the case right now.

(Comments are welcome at info@skoch.in)

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