2. 1.Scrap Value Added
Tax
I think VAT produces a cascading taxation
effect that is not favorable for manufacturing
businesses
Whilst VAT is a consumption tax, imported
goods are not subject to VAT.
This makes domestically produced goods at a
cost disadvantage to imported goods.
All countries that started with VAT have now
moved on to GST
3. 2. Goods and Services
Tax
Does not have cascading taxation effect
Imposed only once in the chain: at the final
point of sale
Covers both manufactured goods and services
Taxes both domestically produced and
imported goods
Canada, Ireland and other countries that
started with VAT have now moved onto GST.
4. 3. Strong and stable
currency
Strong and stable currency reduces inflation
This reduces cost of raw material required by
manufacturing industry esp. oil, gas, coal, iron
ore, etc.
Stable currency provides certainty to
manufacturers about input costs
5. 4. Well laid out
infrastructure
Well developed ports, railways, road networks
are necessary to ensure speedy transport of
raw material and goods
Strong networks of roads connecting ports,
airports and railways is necessary to ensure
timely delivery of goods and no congestions
Last mile links are often the critical bottleneck
All highways need to be expressways with at
least 8 lanes of traffic
6. 5. Identifying areas of competence
Invest in R&D to setup a portfolio of patents and
identify areas of core competence
Make larger investments after initial tests on
products are successful
Set up manufacturing clusters to provide
support systems to businesses
Areas such as semiconductors, carbon
composite materials, electronics, energy are
key areas where attractive returns are possible
with right patents.
7. 6. Case Study: Semiconductor
Fabrication Facilities
India does not have a semiconductor
fabrication facility
Manufacturing of semiconductor memories and
LED displays could be lucrative if we have right
patents
These are high volume businesses where
products with moderate levels of complexity
can sell successfully
Stepping stones to making more complex
designs such as microprocessors and custom
integrated circuits.