BUSINESS ENVIRONMENT

Manufacturing in India: A Road to prosperity ?

MANUFACTURING SECTOR .

These activities provide gainful employment.Manufacturing industry is the engine of economic growth of a nation. create the products required to maintain and improve the standard of living and generate the wealth required for future development. It includes all activities in product life. through conversion of materials and ending with product disposal. . starting from customer inputs for concept design.

.

.

EMPLOYMENT GENERATION  75% of India's working population is educated only to middle school or below Approximately 600 million people is not even equipped to benefit from the opportunities in the flourishing knowledge sector. It is only the labor intensive manufacturing sector that has the capability to generate employment in adequate numbers to absorb the larger labor pool   A high rate of employment will lead to better overall growth of the country improving the standard of living of the country hence reducing poverty. .

The mismatch between distribution of workforce and value added in agriculture is one of the main reasons for the large number of poor.if India is to sustain overall GDP growth of 8% per annum. the manufacturing industry contributes 26 percent to India’s GDP According to FICCI even though agriculture supports 60% of the working population. and this trend is expected to further widen in the coming decades The economic benefits of playing the manufacturing card are quite clear .CONTRIBUTION TO GDP  At present. it is essential that both manufacturing and    . it contributes only 22% of the country's gross domestic product.

China has more than 40% of its GDP coming from manufacturing sector. If India increases its manufacturing sector. When the exports increase Trade Deficit will decrease and Foreign Reserve will increase. As only 26% of the GDP comes from manufacturing sector for India.EXPORT DRIVER  Manufacturing is the export driver throughout East and Southeast Asia. a huge opportunity has not been capitalised. it can help improve the export conditions of our economy.     .

The NAM study cited in its overview uses the estimate of a manufacturing multiplier to demonstrate how much additional output is generated by a dollar’s worth of demand for manufactured products. Manufacturing has the highest multiplier of all sectors. the Indian manufacturing sector is grappling with the problem of competition from low priced mass consumption goods from Chinese and Asian markets and quality competition from products of advanced economies produced by superior technology . Currently.THE GROWTH & BARRIERS Growth in manufacturing fuels other sectors. creating jobs and investment in non-manufacturing sectors.

.

 . Higher cost of utilities like power. Archaic Labour Laws Very difficult Land Acquisition system.   Predominantly over occupation of land under Agriculture Higher input costs for the Indian manufacturing sector as a result of cascading effect of indirect taxes on selling prices of commodities. water    Higher cost of finance – Cost of Capital High transactions costs puts the sector at a severe disadvantage as compared to its Asian counterparts. railway transport.

”  After looking at all the benefits provided by the manufacturing sector.K. we can say that these goals and targets can be achieved by manufacturing sector.TESTIMONY  As C. .Prahlad puts it. growth of 10-15% per year. “there are only two priorities for India – creation of 10-15 million jobs per year.

     . intellectual and cultural.CONCLUSION  Promote the manufacturing sectors and also the agricultural sector in a synergic manner Use innovative approaches that draw upon local resources: natural. academia and industry must work together to create a passion for manufacturing (Karma). leading to social development (Dharma) and eventually to global excellence in all spheres of life (Moksha). facilitate its role in economy (Artha). The Government.

Sign up to vote on this title
UsefulNot useful