Industry veteran and chairman of Maruti Suzuki India, R.C. Bhargava, on Friday said the role of the state governments in making the manufacturing sector more competitive is more important for industry than an antagonistic Centre-state relationship.

Bhargava was speaking on the prospects of a revival of manufacturing in eastern India at an event organised by the Bengal Chamber of Commerce and Industry.

“I don’t think it matters whether the state and the central government are at loggerheads as long as the state government does what it should do to make manufacturing competitive in the region,” Bhargava said.

The fundamental consideration for any industry, Bhargava said, is how to make its goods affordable to consumers.

Instead of a policy that increases the cost of inputs and finished products, what industry needs is an enabling low-cost environment for manufacturing. Affordability will spur demand, which in turn will create employment and earnings for the government which can subsequently be used for social development.

“If the eastern region wants to grow, they have to understand that the bulk of what requires to make industry come to the East lies in the hands of the state governments, the officers and the entire administrative machinery and not with central government or anybody outside,” Bhargava said.

Bhargava rued that the government tends to not recognise the importance of time — whether in making payments to private businesses or interacting with them.

“If industry is to become more competitive, both at the political and the administrative level it has to be recognised that time is an extremely costly and valuable input for industry,” Bhargava said.

Bhargava further said that the government should not create a situation where labour feels it can disregard whatever the management says with somebody there to bail them out.

Bhargava, who had experience in both government and industry, was equally critical of industrialists. He said that industrialists have to comply with tax laws, give up ostentatious consumption, and operate their companies in the interest of all stakeholders including employees.

No expansion

Bhargava said that there is no immediate new capacity planned by the automotive major, including that in the east.

“At the moment we are not looking at any site anywhere, because we have enough capacity. The market for cars is growing very slowly. In the last five years and I am excluding the Covid years, the compounded annual growth of car sales in India was 1.3 per cent. If industry is growing at that rate, why would somebody create large capacities anywhere,” he said.

“Unless growth in India picks up sharply the question of investing in other parts of the country does not arise at this point of time,” he said.