Dr Vishal Gupta
The lethal eruption of the Coronavirus, which originated from Wuhan city in the Hubei province of China has spread to 218 nations of the world. With more than 77 lakh people affected by this fatal virus, countries all over the world are facing the havoc and panic situation possibly not witnessed since World War second. Its worldwide spread has left businesses all over the globe counting the costs. Various nations imposed lockdowns to control the virus, which have utterly stroked the employment providing industries viz. tourism and hospitality, transport and virtually the whole MSME sector. Moreover, nations like the USA, Russia, Germany, Brazil, Australia etc. are encountering stagnant demand and a swift increase in inflation. Across the world a backlash is building against China for the deception and negligence in handling the Coronavirus disaster and made the virus to cross the national boundaries. As a result, countries are reanalysing the much reliance on China for business activities and this has motivated foreign firms to move operations out of China.
The viral calamity has completely uncovered the glum consequences of single-country dependence for business. In this context, it is seen that the US and other countries wanted to shift their business operations outside China to not risk betting all their money on one single horse. Amidst this environment of disgruntlement with China which was known as the world’s factory, companies across the sphere are looking at India as an alternative to China and a new business destination. Because the country has got a literal blend of a skillful and young population, middle class people with mounting purchasing power and an economy that has cuddled digitization. India must capture this opportunity with both hands to help build a more sustainable business world and must improve domestic business environment to take lead. Moreover, with low labour costs, gradually reducing corporate taxes and relaxed bureaucratic red tape, India can become the next manufacturing hub. As per the Global Competitiveness Index, India is the most competitive nation in South Asia, but still in order to convert this crisis into blessing in disguise, India should come up with some fiscal incentives in the form of preferential tax rates and tax holidays to magnetise foreign firms. India should follow superior business standards, along with providing land to the foreign companies, the production line and supply chains must be improved.
It should create such business settings, which will permit multinationals to supply not only the local market, but also to utilise the Indian land as a production base to export to the world. In order to welcome the global firms and present a trustworthy substitute to China as a manufacturing hub, India must provide integrated infrastructure e.g. large ports and highways, high quality labour and refined logistics. So as to make this moment count, the country should come up with some long-perspective reforms, not just land and labour reforms to guarantee lucidity in policy-making and to uphold the inviolability of business contracts. The government should accelerate the privatisation of public sector units (PSUs) to trim down the scope for administrative ministries to hinder the business processes. In some way, the coronavirus pandemic has opened an exceptional gateway for India to attract foreign companies and FDI as it would help in generating employment, creating wealth and promoting ‘Make in India’ and “Self-reliant India” programmes. So, for India, the time is perfect, to bring some sophisticated structural reforms to convince global businesses to establish hubs in India and to renovate its business affiliation with the world. One can imagine if a socialist country (China) without spoken English language and with diverse values from the western world can direct the world economy, so India can also further expand its roots in the global business arena.
(The author is Lecturer in Commerce at Government P G College Bhaderwah)
Dr Vishal Gupta