Banks vs NBFC, Never Had Sustainable Manufacturing Policy

January12, 2019 (C) Ravinder Singh progressindia2015@gmail.com20180922_160512

‘Banks vs NBFCs – Funding for MSMEs’ was the subject of an event yesterday – there are –

Ø  Three Levels of Funding MSMEs – Banks, NBFCs and Moneylenders,

Ø  Three MSME Engineering Contributions – Parts or Sub-Assemblies for LARGE INDUSTRY, Making Products for Consumers, & Servicing Installed Products-Systems,

Ø  Three kinds of SERVICES ENTERPRISES – Directly Serving Consumers like in Tourism, Housing and Transport, Financial Services and TRADE.

Ø  Three levels of SCALE – Developing Products & Services for the World Market, or For Indian Market cum IMPORT SUBSTITUTION and Subsidiaries of Foreign Companies.

Ø  Three KINDS OF COMPANIES – Group of Companies OWNED by a Business Family, Professionally Managed Inventor & Entrepreneur Led Companies and PSUs.

Ø  Three LEVELS of Value Additions & Employability – Low Value Additions in GEMS & JEWELRY, High Value Additions in FOOD PROCESSING and Medium level of Value Addition in Repairing a Product or Building etc.

Ø  Three levels of Intellectual Property –PATENTED Products, Design and Trade Marks.

Banks simply don’t have Any Competence to Deal With Complexities of FUNDING Companies in India – MSMEs or Large. NBFC are ‘Little Better’ Have Recovery Agents.

Though my first experience of manufacturing dates back to 1965 when I was taken to Coca Cola factory in Connaught Place, Delhi– closely associated with ‘Manufacturing Industry’ since 1974 we I used to visit factories – top tests and interviews for Birla, SRIRAM, ISGEC, BST and more top companies – promoters of these groups were FICCI and other leading Chambers of Commerce in India.

Even the Biggest Companies in 1974 had no R&D department & Inventing Program – even Quality Control was only BASIC – [ISI] ‘INDIAN STANDARDS’ were being introducedwhen India ought to have Patents and Design, Trade Mark protection program at the beginning of last Century when Developed Countries were Recognizing IPR as Unique and Exclusive Global Rights of Individuals as well as Companies.

Since India allowed Cheap Imports there is no ‘Quality Control or Standards Applied on Imported Products’ – Anyone Can Import Anything From Anywhere Policy. In 1986 I noticed in USA Imported Products were CHEAP – cost of Service Very High – India too is following Policy of importing UNSERVICEABLE PRODUCTS.

India Never Had Sustainable Development & Manufacturing Policy – Two Case Studies


I didn’t find a single word ‘Technology, Patent, Intellectual Property in Bombay Plan of 1944’. 75 years down the line also – India don’t have any Role for Inventors in Development & Manufacturing Industry.


Reliance Telecom: – RIL entered Telecom sector through backdoor – It first laid Optic Fiber Network in the middle of Roads in 2002 – wanted WIFI based Broadband or Telecom services but in 2003 introduced WLL based Mobile Phone as Fixed Line service and VIDEO CONFERENCING SERVICES – Which was converted in to National Mobile Service engaging SOFTWARE – Switched to CDMA in 2004, then introduced GSM technology also, Introduced Satellite TV Broadcast, 3G and RIL acquired 4G licence through backdoor in 2010 – introduced 4G services.

RIL in 2002 itself could have introduced BROADBAND services like South Korea or Singapore. One connection providing data to 10-15 devices. RIL actively Considering Introduction of 5G just two years after introducing 4G – EVEN BEFORE REALIZING FULL POTENTIAL OF 4G SERVICES.

Indian Railways: –  IR introduced ABB Locomotives in 1994 – which then cost about Rs.28 Cr each with TechnologyIR improved and indigenized it and broad down cost to Rs.8 for each 6000 HP Locomotive. Recently India procured ALSTOM Locos to cost over Rs.45 Cr for TWIN 6000 HP Locos.


DMRC: – In every Line Introduced New Technology – Instead of Reducing Cost of Production to a Third – Like in Case of ABB Locos – from Rs.28 Cr to Rs.8 Cr – Line cost increased 2-3 Times.


TATA-NANO: – NANO was first to be MADE in ‘SINGUR’ in West Bengal but was relocated to SANAND in Gujarat with a lot of Incentives. It failed to SELL due to SHABBY DESIGN.


1.    When a Large INDUSTRY Switch Technology Frequently or Introduced BAD PRODUCT in the market – MSMEs Suffer due to FAILURES OF LARGE INDUSTRY.


2.    IR didn’t engage Railway LOCOMOTIVE Companies, Indian Companies in Improving Indian Railways but introduced General Electric And ALSTOM LOCOS.  




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