Trend in Man­u­fac­tur­ing

Assocham Bulletin - - INDUSTRY -

Ma­ha­rash­tra and Gu­jarat ranked among top states in terms of man­u­fac­tur­ing emer­gence in main­stream states across In­dia, noted a re­cent study con­ducted by apex in­dus­try body AS­SOCHAM.

"While Ma­ha­rash­tra has topped with high­est growth in en trepreneurs memo rand um (EM) part-II filed by mi­cro, small and medium en­ter­prises (MSMEs),Gu­jarat has per­formed very well on pa­ram­e­ters like change in ca­pac­ity util­i­sa­tion, op­er­a­tional ra­tio, value ad­di­tion and in­put cost," stated the AS­SOCHAM study ti­tled 'Man­u­fac­tur­ing Ex­cel­lence and Emer­gence in In­dia: The state level anal­y­sis.'

The AS­SOCHAM Eco­nomic Re­search Bureau (AERB) has con­sid­ered var­i­ous pa­ram­e­ters like num­ber of fac­to­ries, out­put value, work­ing cap­i­tal, net fixed cap­i­tal for­ma­tion, fixed cap­i­tal, fin­ished goods, cap­i­tal in­vested, to­tal in­puts and oth­ers to as­cer­tain the states' per­for­mance in terms of man­u­fac­tur­ing sec­tor.

High­light­ing the method­ol­ogy, the study stated that all states were di­vided into three ma­jor cat­e­gories ac­cord­ing to ge­o­graph­i­cal con­di­tions, viz., north-eastern, Hi­malayan and main­stream states. Main­stream states were fur­ther di­vided into two sub-cat­e­gories, namely, ex­cel­lence and emer­gence.

Fur­ther, the data was taken for each state from sources like An­nual Sur­vey of In­dus­tries, Min­istry of Sta­tis­tics and Pro­gramme Im­ple­men­ta­tion, Gov­ern­ment of In­dia web­site for a five year pe­riod be­tween FYlO and FY15.

The study also high­lighted var­i­ous chal­lenges be­ing faced by In­dia's man­u­fac­tur­ing sec­tor­com­pet­i­tive cost and tech­nol­ogy be­ing of­fered by coun­tries like Bangladesh, China, In­done­sia, Korea, Sin­ga­pore and Tai­wan.

While de­vel­op­ment process in other coun­tries fol­lows a tran­si­tion from agri­cul­ture to man­u­fac­tur­ing and then to­wards ser­vices sec­tor, how­ever In­dia's growth has been ser­vices sec­tor-led as such there have al­ways been con­cerns­about sus­tain­abil­ity of such a growth.

The AS­SOCHAM study also stressed upon the im­por­tance of in­creas­ing share of man­u­fac­tur­ing sec­tor in In­dia's gross do­mes­tic prod­uct (GDP) to ab­sorb a young work­force as bulk of pop­u­la­tion re­lies on agri­cul­ture for em­ploy­ment.

"The Union Gov­ern­ment must ad­dress is­sues re­lat­ing to poor prod­uct qual­ity, in­fras­truc­tural bot­tle­necks and in­ad­e­quate ef­forts at re­search and de­vel­op­ment from a holis­tic macro per­spec­tive as they have col­lec­tively taken a toll on In­dia's man­u­fac­tur­ing com­pet­i­tive­ness," said Mr. D. S. Rawat, Sec­re­tary Gen­eral, ASSOCHAMwhile re­leas­ing the find­ings of the study.

"Con­sid­er­ing that ma­jor­ity of in­vest­ment projects in the man­u­fac­tur­ing sec­tor are stuck in dif­fer­ent stages of im­ple­men­ta­tion, we at AS­SOCHAM have time and again sug­gested the Union Gov­ern­ment to de­velop a strong plan to pri­ori­tise speedin­gup the process by cre­at­ing a tar­get-ori­ented roadmap," said Mr. Rawat.

"At the same time pri­vate in­vestors must also be held ac­count­able and be pe­nalised

if projects get de­layed or stuck due to im­proper plan­ning, change of own­er­ship, lack of fi­nance, ab­sence of co-or­di­na­tion with con­trac­tors and other re­lated is­sues," he added.

With a ra­tio of 1.29, Ma­ha­rash­tra has emerged on top with growth in terms of EM part-II filed by MSMEs at Dis­trict In­dus­trial Cen­tres in FY15over FY13.

The state has also per­formed de­cently well on var­i­ous pa­ram­e­ters with third high­est ra­tio in terms of change in re­turn on cap­i­tal, op­er­a­tional ra­tio, value ad­di­tion and in­put cost.

Be­sides it is ranked fifth in terms of change in to­tal fac­tor pro­duc­tiv­ity, fixed cap­i­tal in­come ra­tio and in terms of growth in man­u­fac­tur­ing gross value ad­di­tion (GVA) in FY15 over FY13.

How­ever, Ma­ha­rash­tra must fo­cus more to­wards im­prov­ing ca­pac­ity util­i­sa­tion (8th rank) and ef­fi­ciency (11th rank).

Gu­jarat is ranked sec­ond among top states in In­dia in terms of change in ca­pac­ity util­i­sa­tion, op­er­a­tional ra­tio, value ad­di­tion and in­put cost.

State has also per­formed de­cently with fourth and fifth po­si­tion in terms of change in re­turn on cap­i­tal and ef­fi­ciency re­spec­tively.

It must fo­cus on im­prov­ing growth in man­u­fac­tur­ing GVA (8th rank) and in fil­ing of me­moran­dum by en­trepreneurs (14th rank). Be­sides, im­prove­ment is also needed on fronts like fac­tor pro­duc­tiv­ity (15th rank) and fixed cap­i­tal in­come ra­tio (16th rank).

The afore­men­tioned pa­ram­e­ters are ex­plained as fol­lows: • EM-II-Growth rate in EMIl filed by MSMEs at Dis­trict In­dus­trial Cen­tres in 2014-15 over 2012-13; high ra­tio is bet­ter.

• Re­turn on cap­i­tal-Profit as a pro­por­tion ofin­vested cap­i­tal; high ra­tio is bet­ter.

• Op­er­a­tion ra­tio-How much of the value of out­put has trans­formed into net in­come; high ra­tio is bet­ter.

• Value ad­di­tion-How much of the value of out­put is net value added in cur­rent year; high ra­tio is bet­ter.

• To­tal fac­tor pro­duc­tiv­i­tyValue­o­fout­put as­apro­por­tion of the to­tal of in­vested cap­i­tal and to­tal per­son en­gaged; high ra­tio is bet­ter.

• Fixed cap­i­tal in­come ra­tioHow much of the in­vested fixed cap­i­tal is trans­formed into out­put value; high ra­tio is bet­ter

• Man­u­fac­tur­ing GVA-Growth rate in man­u­fac­tur­ing GVAin 2014-15 over 2012-13; high ra­tio is bet­ter.

• Ca­pac­ity util­i­sa­tion-How much of the in­vested fixed cap­i­tal has trans­formed into fixed cap­i­tal for­ma­tion; high ra­tio is bet­ter.

• Ef­fi­ciency-How much of the work­ing cap­i­tal is be­ing con­verted into value of out­put; high ra­tio is bet­ter.

• In­put cost-To­tal in­put cost as a pro­por­tion of value of out­put; low ra­tio is bet­ter.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.