Just to add my 2 bits....manufacturing has taken a beating in India also because the MNC"s have discovered other relatively low cost options. Added to that unlike in China our government never made a concerted effort to ensure that we had a clear strategy for the manufacturing sector. They got carried away by all the myth that was created around the Service sector growth, imagining this to be an eternal growth area.
Coupled with this has been the rather piquant situation of real estate prices growing at a Geometric ratio with the creation of SEZ, Malls etc. If you look at the city of Mumbai - many of the mill owners feel they are considerably better off selling the land and living on interest - rather than be entrepreneurial.
Our licensing Raj till the 90's and the dysfunctional labour - management relations stymied the growth of manufacturing in India.
Regards
Bindu Venkatesh
On Mon, Dec 9, 2013 at 6:24 PM, Prabhakar Waghodekar <waghodekar@rediffmail.com> wrote:
Manufacturing sector is the wealth creating sector. Mfg sector in India needs
the following, ir-respective of SMEs or big houses:
1.
R & D boost up to improve productivity and performance.
2.
Engg/Mngt colleges, NITs, IITs can play a major role to improve this. The
institutes association with industry must be mandatory.
3.
Infrastructure like energy supply, roads/rails/air efficient transport,
effective communication.
4
Minimum red tapism and free flow of sound financial support must.
5.
Globalization means downsizing. We need to generate new products and markets to
boost up employment.
______________________________________________________________________
On Sun, 08 Dec 2013 15:03:35 +0530 wrote
> The crisis in Indian manufacturingThe fate of the manufacturing sector hinges
not only on an investment revival but also on a sense of directionJayan Jose
Thomas India's industrial output has declined or grew at very low rates in
almost every month after July 2011. The index of industrial production (IIP)
provides data on organized manufacturing, that is, on factories, which employ 10
or more workers (20 or more if run without electricity). Less known but more
acute, however, is the crisis that has hit the smaller industries in the
unorganized sector—the sector that employs 80% of all manufacturing workers in
the country.But, first, about organized manufacturing, which was indeed one of
the bright spots in India's economic growth during a good part of the 2000s.
Rapid rates of growth were registered in this sector, particularly in the
manufacture of metals, machinery and automobiles. India has been a favourite
investment destination for global automakers, especially for the makers of low-
cost cars.More importantly, this was not merely an expansion of output, but an
impressive growth in employment too. More than three million new jobs were
generated in India's organized manufacturing between 2004-05 and 2009-10. That
was in marked contrast to the near "jobless" growth that characterized this
sector for the two-and-a-half decades since the 1980s.India's organized
manufacturing rebounded impressively after it slowed down during 2007-09 at the
height of the global economic crisis. The recovery was led in particular by the
auto industry, with the domestic production of passenger cars rising from 1.5
million in 2008-09 to 1.9 million 2009-10.But that revival seems to have been
short-lived. India's automobile industry has entered a phase of stagnation, and
so too has organized manufacturing as a whole, as shown by the recent numbers on
IIP growth.Employment and unemployment surveys conducted by the National Sample
Survey Organisation (NSSO) shows that the total manufacturing employment in the
country declined absolutely, by three million, between 2004-05 and 2009-10. It
is to be noted that this decline in overall manufacturing employment occurred
despite a revival in employment in the organized sector. Clearly, it points to a
sharp absolute fall in unorganized manufacturing employment in the country by
the late 2000s.The latest NSSO survey indicates some revival in manufacturing
employment between 2009-10 and 2011-12. Nevertheless, the survey shows that the
generation of unorganized manufacturing employment in India has decelerated
markedly: from 12.6 million new jobs between 1993-94 and 2004-05 to just a
little over a million new jobs between 2004-05 and 2011-12. While capital- and
skill-intensive industries such as metals, petrochemicals and automobiles
dominate organized manufacturing, India's unorganized manufacturing consists
mainly of labour-intensive industries such as food products and textiles. The
deceleration in India's labour-intensive industries began in 2006-07. The
appreciation of the Indian rupee that occurred during this time affected the
growth of export-oriented industries such as textiles, garments, leather, and
gem cutting. As the global economy plunged into a crisis by 2008-09, these
industries were hit further, by the downturn in export demand from Western
countries, resulting also in large-scale job losses. Further, the growth of
India's textile industry has suffered due to the volatility and the generally
high level of cotton prices in the country since the late 2000s.A factor that
has consistently been at the top of the list of constraints to Indian
manufacturing has been the shortage of power and other essential infrastructure.
Power demand-supply shortages have been reported from a majority of Indian
states. In the industrial town of Coimbatore, where this author has been
carrying out a field study, there have been acute power shortages for
approximately eight months every year since 2007. As a consequence, industrial
units in this city have had to operate at 50% or even less of their actual
production capacities. The crisis in the infrastructure sector is on account of
the decline in public investment in India beginning in the 1990s, aggravated by
the fall in private corporate investment too after 2007-08.Micro and small
industries are hurt due to inadequate access to bank credit. Advances to small-
scale industries as a proportion of non-food gross bank credit in India fell
from 15% in 1990 to around 6% during the second half of the 2000s. According to
a survey conducted by the NSSO in 2005-06, only 3.6% of unorganized
manufacturing enterprises in the country obtained loans from institutional
sources.After the mid-2000s, there has been a marked increase in the share of
imports in the domestic output of machinery and transport equipment industries
in India. This too has depressed the growth prospects of small-scale industries,
as rising imports deny them the opportunities for the manufacture of components
and ancillaries.The IIP figures for recent months suggest that a sustained
revival of India's organized manufacturing is still some distance away. And this
is worsening the crisis that has plagued unorganized manufacturing in the
country. Clearly, there is an urgent need for greater domestic investment and
well-directed industrial policies for achieving a widespread renewal of Indian
manufacturing.Educate, Empower, ElevateProf. Bholanath DuttaFounder, Convener &
President
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Regards,
Dr P H Waghodekar
Advisor (HR), IBS & PME (PG)
Marathwada Institute of Technology,
Aurangabad: 431028 (Maharashtra) INDIA.
(O) 02402375113 (M) 7276661925
E-Mail: waghodekar@rediffmail.com
Website: www.mit.asia
Engineering & Management Education: An Engine of Prosperity.
Classroom teaching must match with Boardroom needs!
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