Taking India Back In Time
The India Commentary view
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By Our Editorial Team
First publised on 2023-08-07 08:18:05
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The India Commentary view
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It is good to produce anything in the country and create an ecosystem for such production. It is also not bad to put pressure on companies to start producing in India. This pressure can take the form of applying both the carrot and the stick. The Indian government has been pushing for Make in India and has also started incentivizing several sectors through a production-linked-incentive (PLI) scheme to make it attractive for companies to produce in India. The PLI scheme has yielded excellent results in some sectors. But for laptops, PCs and tablets there were no takers for the PLI scheme and no applications were received for setting up production facilities for the same in India. The government consulted with industry bigwigs and sweetened the deal but still no applications were made. Hence, the government took the extreme step of putting restrictions on import of laptops, PCs and tablets and brought it under the licensing regime. Henceforth, all imports of these items will require a licence. Although the licence regime was to kick in immediately, the government has deferred it by three months (it now kicks in from November 1) after concerns about disruptions, shortages and price rise.
The concern about huge imports from China (which is by far the largest supplier of laptops, PCs and tablets to India) is valid and so is the push to get these products made in India to bring in investment and create jobs. But this is not the correct way. This brings back the much-derided licence raj that was prevalent in the country before the economic liberalization in 1990s. The government has done much to usher in Digital India. The first requisite of a digitized economy is free availability of equipment (in this case laptops, PCs and tablets) at fair prices. Import restrictions will reduce supplies and raise costs. The government has said that there will be no caps on the number of units that can be imported and hence prices will not rise. If that is true, what then is the need for licencing? The licencing regime will bring back bureaucratic discretion, red tape and corruption and take India back in time. This is not something that the excellently-unfolding India story needs at this point of time.
