Scm pro is this the fresh start - may 2014

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Regulatory uncertainty under the previous government has prevented the kind of growth all anticipated. Darryl Judd says with Modi government in centre may be this is the start India need, says Darryl Judd

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Scm pro is this the fresh start - may 2014

  1. 1. SCMPr n insight n Human Resource n report n Knowledge n Academic Advocacy Supply Chain Management Professional insight India’s Foreign policy paves pay for optimistic supply chains. Page...07 International Feature Recasting Mid- dlemen in the Produce Supply Chain. Page...38 report Transportation and Logistics 2030 . Page...34 May 2014 Vol. 2—No. 3 `150 In This Issue Fast, Forward, Focused Outsourcing:
  2. 2. Is This The Fresh Start n INSIGHT n HUMAN RESOURCE n REPORT n Knowledge n ACADEMIC ADVOCACY India Needs?SCMPr May 201430
  3. 3. talent 31SCMPr May 2014 31 W ith India’s gen- eral election now largely out of the way and The BJP- led party having emerged victori- ous with a landslide victory, busi- ness leaders throughout India and the world await for signs that will kick start the Indian economy. Narendra Modi, the new PM, campaigned predominantly on is- sues of development and anti-cor- ruption. But is this enough? And more importantly, can he really deliver the kind of changes needed to inspire international business to invest in India? Last five years, the Indian econ- omy has faltered with business growth stalling and the currency witnessing huge volatility. This volatility continued its severity and affected major macro-economic data, including investment growth, inflation, trade and investment. Managing volatility in the cur- rency markets has become a big challenge for policymakers and Modi’s BJP party will face the same challenges. Despite a series of meas- ures taken by the central bank as well as the government to curb the volatility in the markets, the rupee continues to depreciate. The trend is unlikely to reverse any time soon. The rupee depreciation is hurt- ing the Indian economy. It’s fuel- ling inflation and has hurt eco- nomic growth. Growth that is desperately needed if India is to reverse it is ever increasing unem- ployment rate. The failure of the previous gov- ernment to unify the states and to stamp out unnecessary bureaucra- cy and corruption, both organized and unorganized, has reduced the appetite of multinational business Regulatory uncertainty under the previous government has prevented the kind of growth all anticipated. Darryl Judd says with Modi government in centre may be this is the start India need, says Darryl Judd Darryl Judd COO, Logistics Executive darrylj@logisticsexecutve.com to invest on the scale needed to ensure India continues a growth needed to support its growing population. Structural reforms have fallen foul of political gridlock in the past and the hope is that Modi can clear roadblocks. Analysts say India needs to simplify its tax code, encourage foreign investment and streamline agricultural production. Modi will have to move fast if he’s to meet the expectations of international busi- nesses and encourage their invest- ment in India’s recovery. Modi likes to emphasize his management credentials. He cam- paigned on a record of low unem- ployment and high foreign invest- ment in Gujarat, the state he has led since 2001.He has promised to end policy paralysis, reduce infla- tion and tackle corruption. He has also pledged to establish manu- facturing hubs and industrial cor- ridors, improve the tax code and reform the banking sector. This all sounds good and cer- tainly has the potential to drive economic growth, spurring on em- ployment. But can he deliver on the kind of infrastructure necessary to make a difference to supply chain? According to DHL’s recent Glo- bal Logistics Report, a vital step in India’s further development is ex- panding the road and rail networks, and modernizing harbors and air- ports. An increasing globalization has raised volumes of transport without a commensurate increase in logistics infrastructure. Moderni- zation of systems, facilities and im- port/export duties are keys areas to attract overseas investment. Transshipping times for ships in Indian harbors are three to four times longer than the average time in the West. So the cost of logistics. For this reason, India will have dif- ficulties positioning itself as a glo- bal logistics hub unless firm com- mitments are made. Road Transportation is an im- portant link that facilitates produc- tivity and competitive efficiency, leading to rapid economic devel- opment. It also brings about the development of remote regions by opening them to trade and invest- ment. And it’s not just infrastruc- ture development that needs com- mitment. It’s cultural issues such as corruption that businesses will be looking at Modi for. The cul- ture of acceptance must cease and Modi must be true to his commit- ments to stamp this out at all levels and lead cultural change. This will ensure future levels of necessary employment growth if India Is to reduce its long-term unemploy- ment and improve the prosperity of more than 30 percent of India’s population who live below extreme poverty. Let’s hopes that this is the fresh start that India so desperately needs.

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