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OEM Update

“Startup India will take time to pick up traction in manufacturing sector”

March 29, 2016 2:54 pm

Unless and until funding-related challenge is addressed, Startup India will take time to pick up traction in manufacturing sector.
 With the aim of filling gaps in the economy for the growth and development of start-ups, Prime Minister Narendra Modi has kicked off the ambitious Startup India movement. L. Krishnan, Immediate Past President – IMTMA and Managing Director, TaeguTec India Pvt Ltd has spoken at length on this initiative. He also talked about ‘Skill India’ and procurement eco-system.
The government has initiated Startup India. What are the scopes for manufacturing sector in this context?Current level of activities in Startup India is more focused towards IT and IT-related services and mobile technology because there are multiple option mechanisms to fund and recognise these technologies and grow the market. When it comes to manufacturing the momentum on this area is yet to pick up. There are several reasons. One of the reasons is that for start-ups in manufacturing sector we don’t have innovative funding mechanism; funding mechanisms are through traditional banking route which is always a challenge today for SME or a start-up in manufacturing. So unless and until funding-related challenge is addressed, Startup India will take time to pick up traction in manufacturing sector.
Each of the business has different kind of ramping and traction. The scaling up methodologies is different and the dynamic of each of these industries and technologies work with different dynamics and manufacturing industry works with slightly different dynamics. Though there are a few initial private equity investors but they cater to the technology sector. We need to have several such structures to emerge even in manufacturing sector only then probably it will scale up.
What about the Skill India? Skill India is a very critical initiative but as far as manufacturing sector is concerned, the sector has been skilling for a long time. The machine tool industry as association is very focused on Skill India initiative. We have started with shop floor people and students. We are also conducting short-term training programs for existing executives who are working in the industry to upgrade their skills. So multiple efforts are going on in terms of Skill India. But the challenge will be: as real growth will start coming in to manufacturing industry, we need to examine whether these activities in currently scale are enough. We may need to scale up these activities across the country and not limited to certain locations which are already industrialised today. The new emerging manufacturing destinations may not have adequate amount of institutions to do the skilling. We need to set it up and find innovative ways to deliver trainings in those locations.
Former DRDO chief VK Saraswat, a NITI Aayog Member, talked about lack of advancement in technology in Indian manufacturing sector. What’s your comment? Dr Saraswat was more talking from the point of view of indigenous development of some of the technologies. Technology development is a complete different initiative which is not related to skilling. However it will remain as challenge and the opportunity in the country. We will have to keep doing skill gap analysis across different geographies across the country and create institutions which can deliver skills relevant for those regions.
A lot has been spoken about the manufacturing eco-system. What about the creation of a procurement eco-system?In case of a private organisation, making and supplying goods and services while we can give them guidelines as to we would prefer them procuring the products and services available in India. But at the end of the day it is when they need to guarantee certain level of performance and cost to the final customer, they need to be given liberty to source the product and services from where they are. You cannot limit them with several conditions. But when the ‘Make in India’ movement will really take momentum in the areas of defence procurement and public procurement, we have a great opportunity there to impose some of these conditionalities and then use it to scale up domestic value addition.
Could you brief us on the recent developments at TaeguTec India?Manufacturing activities in India has not really grown during the past 2 years. Therefore, significant capacity addition is not taking place as we already have enough capacity to meet the requirement of growth. TaeguTec India is always focused on bringing in the latest technologies to the country so that we make Indian manufacturing community more competitive.

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