Make hay while its dark and damp

An article in The Hindu dated 25 Feb,2009 read 'No Joint Ventures for Rail Projects'. Railways had initially decided to invited bidders for 33 Joint Venture projects, but recently announced that it would be completed by the railways by itself as the response by the bidders were poor. The reason such a turn of events could be-

In this time of economic crunch, organisations are looking for cross-sales(more sales or profits from existing customers or their existing field of work) and are disinclined towards going into unchartered territories.

This is for the first time that the railway is offering a JV on Electric and Diesel locomotive Factories and Coach Factories and these heavy industries require enormous investment and technical skills. This requires lot of money, which the companies do not have and it needs new human resources in terms of qualified engineers, technicians and skilled labourers which adds to the cost and a lot of technology which might be unfamiliar to the company.

It is therefore essential that the government utilise this time. The price of raw materials have come down, there is an economic crisis looming and unemployment is rising. The government must initiate employment generation programmes in the form of infrastructure development and invest in education. The benefits are

1) Once the recession is over, we will be in a better position to jump ahead in the race. In Formula-1, when the safety car is on, the race cars are required to drive slowly. During this time, most of them take a pitstop to refuel and change their tyres so that when they can resume racing, they are well positioned to leap ahead. India must adopt this strategy.

2) Low raw material price means we can complete more work than before, when the price of commodities like cement, steel and fuel were sky-rocketing.

3) Investment in education, especially higher education means that more individuals will now go for specialising their skills. More graduates will prefer going into the teaching, pure science, research and development field as it is much more secure. Till now, these were neglected due to the slow rise in pay and promotion and the hardwork involved. Increased investment in education will result in highly qualified workforce for the coming projects, a highly experienced teaching force and more thrust to science and technology.

There are companies that are making use of this downturn. The developers of the Mundra Port and Special Economic Zone had asked for permission from the Board of Approval (BoA) in the Union Commerce Ministry to almost double the power generation capacity at the sector-specific SEZ at Kutch in Gujarat (The Hindu, May29-2009 ‘BoA to decide on Mundra, DLF plans’. The developer had given justification for raising the generation capacity stating that economic slowdown had resulted in a reduction in the price of power plants and the lower capital expenditure. This decision is based on the sound reasoning that once the recession is behind us, there will be a spurt of developmental activity and if they double their capacity, they will be ready to make use of the opportunity much before anyone else can even think come to a decision about their future course of action.

A little bit of foresight will enable us to overcome the economic downturn, if not benefit from it. We often hear the saying 'Make hay while the sun shines', I say 'Make mushrooms while its dark and damp'!