“We should also look into corporatisation of the defense manufacturing factories which are operating at 10 percent capacity to unleash the true potential of these companies,” he said in an address at IIM Bangalore.
According to a copy of his speech released by his group here, he said corporatisation will help in creating thousands of jobs and improve the performance of these companies drastically.
“Global markets do not want India to produce. They just want India to be a market,” he noted.
Corporatisation is the act of reorganizing a government-owned entity into a legal entity with the corporate structure found in publicly traded firms. The main goal of corporatisation is to allow the government to retain ownership of the company while allowing the firm to run as efficiently as its private counterparts.
Last year, the government restructured the over 200-year-old Ordnance Factory Board (OFB), which manufactures everything from tanks and armored vehicles to rifles, ammunition and clothing for the armed forces, into seven state-owned corporate entities to improve its accountability. , efficiency and competitiveness.
“We also import a huge quantity of semiconductors and semiconductor components which includes glass displays. There are only four players globally that manufacture display glass,” he said. “We have such a potential that in two years time there can be another Silicon Valley created in India. The government is very favorable and in time we will produce cell phones, laptops, television sets at one-tenth of the price.”
has announced plans to start manufacturing semiconductors in 2-3 years.
“We need to leverage our resources and talents. That will help us produce domestically at a much cheaper cost than other countries,” he said. “Be it gold, copper or other resources we must produce to our potential to reduce our imports.”
Agarwal, who heads the mining-to-oil conglomerate
made a case for privatization of PSUs.
On corporatisation of state firms, he said in western economies, most of the companies have been corporatised where the share has been given to the public.
In India, it has to be ensured that not a single job is lost in the public sector. “Secondly nobody can have more than 5 percent of share. A board should be appointed who should run the company. There is a lot of potential in PSUs. A transformation would see an increase of production by at least 3-4 times.”
“In the 70s we followed the Russians, the communist pattern which was necessary for the government to drive all the manufacturing. That was the time when whatever you produce was under the government. We were very proud of our PSUs. Those times have gone, now the government has no business to be in business,” he said.
He, however, did not say which sectors or PSUs the government should privatise.
Vedanta had acquired 51 per cent government stake in Bharat Aluminum Co (Balco) for Rs 551 crore in 2011 and 64 per cent in
for over Rs 750 crore in 2002-03.
“Today India is an import based economy. People don’t realize but almost 70 per cent expenditure goes into imports with 13 per cent in defence, 15 per cent in electronics and 40 per cent in natural resources. Moreover we don’t get technology easily to process it,” he said. “The important thing is how we can improve both production and consumption. There is a phenomenal opportunity in India.”
Agarwal said one of the biggest outflows in India happens in the education sector. “20 percent of faculties teaching abroad are Indians. We can create institutions in India which will attract foreign students.”
“Jobs are being created outside for the produce which should have been produced domestically. We need to work towards reducing imports to stop our hard earned money flowing abroad. Trust has to be built, self-certification has to come into place,” he added. .