This is a direct consequence of India’s labor laws. Why would I hire labor when I can substitute it with capital and not have to put up with draconian requirements?

India’s labor laws are among the stringest in the worls, on par with Germany and France. US is by and large “at will employment” country.

Only 8% of the Indians are in the formal economy, it is for their benefit and protections these laws were designed. Other 92% can go go hell!

Indian politicians rail about jobless growth or ‘non inclusive’ growth all the time, not realizing that capital and labor are interchangeable. When capital is freed, as happened in 1991, and labor laws keep labor under tight control, rational entrepreneurs take the cue and use capital instead of labor.

https://economictimes.indiatimes.com/tech/internet/automation-is-sweeping-across-indias-manufacturing-space/articleshow/69262579.cms

Streamlining to run efficiently the state run enterprises is an oxymoronic idea. It is just not possible. Incentives are just not there, no body is going to get richer if the company is more profitable, as the stock is not listed where investors can reward the managers of a well run company. The state run enterprises, atleast in India are there to provide patronage by the politicians and bureaocrats and also also are a source of perks for them.

Time to privatize them or shut them down. Why does India need Air India? Its capacity to suffer infinite losses and still be able to fly is putting pressures on other players in the industry. Why does government need to run any business?

Like we used to say at IIT, fundas are just not clear!

https://economictimes.indiatimes.com/news/economy/policy/central-public-sector-enterprises-to-merge-or-list-subsidiaries/articleshow/69816815.cms

Startup India is a flagship initiative of the Modi Sarkar. It should give confidence that government is serious about this. But I am afraid it is blowing it. It totally babufied (bureacratized) the initiative and mucked with the market and played favorites. It celebrates the the totally silly “Unicorns”.

It is time to get serious here. India can’t afford to miss this boat too. Next one may be long time coming.

https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/startups-waiting-for-regulatory-relief/articleshow/73207550.cms

This presentation was done in 2008 for a conference at Kellogg and I later updated it in 2012 for a prsentation somewhere.

Since then, image of India is taking a big hit under Modi. Its emergence as a great power is not sure anymore. Its successful integration of huge diversity is in danger now.