Indian Manufacturing Sector

Submitted to: RVM Finishing School & Consultancy. www.rvmfinishingschool.com 9550812082

GDP-Manufacturing sector

Presented bySonam Gangwani

& Pallavi Sen


AGENDA• History of GDP• GDP growth %• Manufacturing sector• Current Scenario• State & Sector wise contribution to GDP• Manufacturing & Employment Relation• Government Initiatives• Challenges faced by manufacturing sector• Future outlook


HISTORY

GDP was first developed by SIMON KUZNETS.Basically after Breton Woods Conference, held inNew Hampshire in 1944,GDP became the main tool for measuring a countries economy.

GDP

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

9.48% 9.57% 9.32%

6.72%

8.00%8.60%

6.88%

GROWTH % OVER PAST 8 YRS

GROWTH % OVER PAST YRS

Source: www.mospi.nic.inSubmitted to: RVM Finishing School & Consultancy. www.rvmfinishingschool.com

9550812082


Different Sectors

Agriculture sector

Manufacturing sector

Service sector

Manufacturing

Basic goodsCapital goods

Intermediate goods

Consumer goods

ElectricityCoal

FertilizersCement

Steel casting

Commercial vehiclesElectric motorsWagonsHeavy

locomotives

Giant tyresPetroleum

BoltsPaintsJute

Plywood

PaperSugarWheatSoap

PhoneTea



MANUFACTURING SECTOR

Backbone of any economyFuels growth & employment

generationCatalyst for agricultural & service

sectorBarometer of overall health of

economy


Top sectors in Indian manufacturing

AUTO INDUSTRY CHEMICALS ELECTRONICS ENGINEERING FOOD PROCESSING GEMS AND JEWELLERS LEATHER MACHINE TOOLS TEXTILES WATER MINING

41%

25%

17%

14%

2% 1%

contribution %

EngineeringGems & JewelleryChemicalsTextile & productsLeather & productsHandicrafts


Current scenario

Spectacular growth after slowdown in 90’sMore diversification & better availability of

skilled man powerSignificant player in aerospace industry

undergoing transformationGenerates about 45 million jobs, 80% of which

are unorganized segmentPotential to create up to 90 million jobs by 2025


STATE-WISE CONTRIBUTION

Strong manufacturing states Gujarat, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh, Goa, Haryana, Jharkhand

Medium manufacturing states Chattisgarh, Himachal Pradesh, Madhya Pradesh, Odisha, Punjab, Rajasthan, Uttar Pradesh, Uttarkhand

Weaker manufacturing states Tripura, Sikkim, Nagaland, Kerela, Bihar,Assam Jammu & Kashmir, West Bengal


SECTOR WISE CONTRIBUTION TOWARDS GDP

2006-07 2007-08 2008-09 2009-10 2010-11 2011-120%

10%

20%

30%

40%

50%

60%

70%

20% 19% 18% 17% 17% 16%

26% 25% 26% 26% 26% 25%

54% 56% 56% 57% 58% 59%

AGRICULTURE MANUFACTURING SERVICE


Manufacturing & Employment Relation

china germany japan russia brazil thailand usa india uk

28%

22%19% 18% 17%

15%13% 12% 11%

Employment contribution

%


Government Initiative

National manufacturing competitiveness council (NMCC)

Set up in September 2004Inter disciplinary & autonomous body at

highest levelSustain growth of manufacturing industriesSuggest ways & means for enhancing sub

sectors having potential of global competitiveness


CLASSIFICATION IN MANUFACTURING SECTOR(12TH PLAN)

SECTOR OF STRATEGIC

IMPORTANCE

SECTOR OF BASIC INPUT

SECTOR OF DEPTH AND VALUE ADDITION

SECTOR FOR EMPLOYMENT

DEFENCE EQUIPMENTAEROSPACE

SHIP BUILDING & REPAIRCAPITAL GOODS

STEELMINERAL EXPLORATION

FERTILIZERCEMENT

AUTOMOBILEELECTRONICS

PHARMACHEMICAL

PAPER

TEXTILEFOOD PROCESSING

LEATHER & LEATHER GOODSGEMS & JEWELLERY


CHALLANGES

Manufacturing sector requires urgent attention both at macro and micro levels

Tax burden on MSME Enhancing the skills of the workers Up gradation of technology High cost of production Quality of products Manufacturers operating beyond their capacity Expensive financing Low labor productivity Poor infrastructure Raw material cost


Expectations

Increase in rate of job creationFocus on level of domestic value additionEnhance the global competitiveness through

appropriate policy supportEnsure sustainability of growthIncrease in manufacturing sector growth to 2-

4% more than GDP growth for the economy and increase share to 25% of overall GDP by 2025


Growth expectations for 2012-13 compared with 2011-12

SECTOR GROWTH EXPECTATION

CHEMICALS LOW

FOOD PRODUCTS MODERATE

ELECTRONICS & ELECTRICALS LOW

TEXTILES MODERATE

CAPITAL GOODS LOW

STEEL & METALS LOW

AUTOMOTIVE LOW

CEMENT STRONG

LEATHER & FOOTWEAR MODERATE

TYRE LOW

MACHINE TOOLS LOW

TEXTILES MACHINERY MODERATE


Potential

Only manufacturing sector has the capacity to absorb large labor pool of the country(CISCO)

Manufacturing sector has great potential to employ people and increase the income levels(FICCI)

India placed 2nd in the Deloitte Manufacturing Competitive Report

India has beaten Brazil in the production of motor vehicles which is good sign for countries growth in value added manufacturing

Sources

www.ibef.orgwww.reuters.com

www.wikipedia.comwww.google.com

www.investopedia.comwww.investorzclub.comwww.machinemag.com

www.articles.economictimes.indiatimes.comSubmitted to: RVM Finishing School & Consultancy.

www.rvmfinishingschool.com 9550812082

http://www.ibef.org/

http://www.reuters.com/

http://www.wikipedia.com/

http://www.investopedia.com/

http://www.investopedia.com/

http://www.investorzclub.com/

http://www.machinemag.com/

http://www.articles.economictimes.indiatimes.com/


Business

Indian Manufacturing Sector