Policy changes implemented by the Narendra Modi-led BJP government since 2014 have led to conditions conducive for competitive manufacturing, RC Bhargava, chairman of Maruti Suzuki, told shareholders at the company’s 39th annual general meeting (AGM).
The 86-year-old Maruti veteran also said the last 70 years have neither generated desired growth levels in the manufacturing sector, nor the conditions required to attain growth.
“The manufacturing sector growth is something which we have been attempting for the last 70 years. But, we have unfortunately not reached the desired growth levels and the kind of conditions required to have that growth in all these 70 years," Bhargava said.
The past few years have seen the government introduce multiple policies for the automotive sector. This included the unprecedented jump to Bharat Stage VI from BS IV, while completely skipping BS V. Nowhere else in the world has any government done anything similar.
Vehicle crash test norms, changes in cargo load carrying levels, greater emphasis on electric vehicles, introduction of formal rules on vehicle recalls, and regulations on defective vehicles were some of the crucial changes made in the automotive industry by the government in the past four-five years.
“In the last five-six years, many changes have been made by the government in policies, which are making conditions much more conducive to competitive manufacturing. To the best of my understanding and knowledge, the government is very aware of all other steps which are needed to ensure and bring about competitiveness in the Indian industry," Bhargava added.
Bhargava blamed the adoption of "Soviet policies of economic development" and sticking to them despite them failing to deliver the desired results.
“We must remember that the initial problem with manufacturing growth arose because we adopted the Soviet policies or they were based on the Soviet policies of economic development. As time passed it was apparent that these policies were not delivering the results. The unfortunate part is that we didn’t change with time. And we persisted with the same set of policies even though they were failing to deliver results," he said.
India’s passenger vehicle segment recorded one of its worst years in FY20, recording sales of 2.77 million units, a decline of 18 percent compared to FY19. Sales of the entire automotive industry slumped by 18 percent to 21.54 million units in FY20, as per data shared by the Society of Indian Automobile Manufacturers (SIAM).
The automotive industry has refrained from providing an outlook for FY21 because of the disruption caused by the COVID-19 pandemic. However, the industry feels that growth should be back on track from October onwards.
“I believe the pandemic is creating a greater awareness among all the people in the country that this is the time to make radical changes in the way we do our work. This is the time when we should take steps which should lead to much faster growth of the economy, which means much faster growth of manufacturing," Bhargava added.
“All of us should understand the changes that are required. Participate and support the government policies; bringing about those changes and make India a more competitive manufacturing in the country. And if that happens, we will all prosper, we will all grow much faster," Bhargava said.