A Scientist's Take On Competing In A Free Market

In a hyper-competitive globalised free market era, proponents of an interventionist government would have rejoiced hearing V.K. Saraswat, the accomplished scientist, researcher and member of the Niti Aayog, at a recent meeting of mathematicians and statisticians in Hyderabad. At a time when free market is seen as an end to all ills and a gateway to fair play, he said: "look at the biases of countries by way of subsidies, interest rates or taxation," and asked: "How do we compare ourselves (India) with nations that have negative interest rates or high subsidies and (these nations) say we need to compete with respect to each item in the global economy?" However, economists, unlike Saraswat, justify negative interest rates of countries like Japan and in Europe saying that their economic growth rates are not at the pace and tempo with India's high growth rate of 7 to 8 per cent.

Meanwhile, Saraswat has his good reasons and examples of Indian sectors in pain - from steel industry to textile industries and even rubber. He said Kerala is crying today because we have signed an FTA with Malaysia. He was referring to news reports about how the rubber industry in Kerala was heading towards a crisis following Centre's move to slash import tariff for a number of rubber products - the crucial raw material for aviation and automobile tyres. In a June 21 notification, the Central Board of Excise and Customs had provided tariff concessions for goods imported under the India-Malaysia Comprehensive Economic Cooperation Agreement, which apparently could lead to flooding the market with a range of cheap goods from Malaysia.

So, how does one "Make in India," if apparently, there is no level-playing field in the global village?

However, Saraswat, also the former director general of DRDO (Defence Research and Development Organisation), must have been happy to see DRDO recently announcing the conclusion of its technology-transfer for its indigenously developed Copper-Titanium technology to Pahwa MetalTech, a Pune-based startup, under the aegis of the DRDO-FICCI Accelerated Technology Assessment & Commercialization initiative. It certainly stands out as a classic example of the capabilities of Indian scientists and the fruits of protectionism in select spheres. Saraswat's critics, including some well known thinkers and economists, have often criticised DRDO for few success despite six decades of protectionism. Unlike ISRO (Indian Space Research Organisation), DRDO has few commercial products except shining examples in the field of missiles - Agni, Prithvi, Brahmos and Akash. But then, these were largely under the leadership, drive and encouragement from A.P.J. Abdul Kalam. Even success of Tejas aircraft is often questioned because its engines are still imported from GE despite several decades of development.
In this context, it would be needless to say that all eyes would now be on Niti Aayog to see its long-term vision for Indian economy and goals for short-term actionable points that can ensure "Make in India" despite challenges faced by the industries like high interest rates, mounting transportation costs and high prices of power.