ICICI Securities: A Discussion On Domestic Auto Manufacturing Competitiveness
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ICICI Securities Report
We hosted Mr. RC Bhargava (Chairman - Maruti Suzuki India Ltd.) to hear his views on the state of domestic manufacturing and its competitiveness.
His recent book titled, ‘Getting Competitive - A practitioner's guide for India’ discusses the topic quite extensively, makes for a timeless lesson in evolution of manufacturing in India.
In our session, he delved into the issues shackling the Indian manufacturing and the way forward.
Key takeaways: Delving into the past – noble objective yet flawed execution-
Mr Bhargava mentioned, post-independence, the broader goal of policymakers was to create economically equitable society based on socialistic ideologies.
However, the policymakers and bureaucrats did not believe in enabling a larger private enterprise in India.
The task of delivering on these challenging economic goals was entrusted to public sector undertakings.
PSUs were expected to generate adequate returns on the capital and create internal resources that could lead to increased investments for growth, technology development and modernisation.
However, instead of creating surpluses, these undertakings increasingly needed governmental financial support for both maintenance and growth capex.
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