Ad Here  
November
December
January
February
March
April
 
 
Multi-faceted Venkat Poor representation for Kerala and TN in Cabinet Wise Presidents SoA @ 80 Editor's Says CSR and CMI: promise of another Srinivasan Ramanujan... The Gulf aviation boom A Grand Finale for SN’s MS centenary at the US… Medical costs hit the roof... WTO Meet: resolved to meet again More heat than light Convulsions in The Hindu A glass full of corruption Odisha: spectacular win by Naveen Patnaik Nuclear power at the nucleus Adapt Vajpayee dinner diplomacy When TN politicians can emulate Kerala's Discoms deserve better… Parliament in paralysis... Sweeter prospects for sugar Shipping woes of Chennai companies Airlines in India: cost and space Where a state respects its litterateurs… The star of Spencers is no more Another Indian music maestro at the UN For whom the bell tolls? Tihar, Puzhal not different from Parappana Agrahara Fuel for thought The why of tax incentives Pharma – overdose of copying London, London Narayan Tribute – Manikam Ramaswami Tribute – UCAL Selvan… Welcome focus on core competence Padma Bhushan for A Ramakrishna TELANGANA at last…BUT CIPET hqrs to stay at Guindy – for the present? Strengthen the base... When nations steal growth from one another… Music happens New IT products of Ramco in the pipeline… An informal presentation - analytical, forward locking... Editor's Notes Bihar elections - the Rajaji formula worked Secularism and anti-Hinduism Banning booze... The Jan Dhan bonanza When online building permits work…. Boy, can you beat these? TN accounts for the largest recruits by the IT sector Air Asia India will set new benchmarks for budget travel An inexplicable neglect Shanti and Sadhana through Music Not just in-laws (and outlaws); they’ve renowned academics at the helm! Make standards certification mandatory... Come elections, come advertisements... Solar, solar everywhere … Increasing non co-operation of state leaders Plummeting profits of PSBs The power-full Hindujas PC’s preference for professionals Roaring Ro-Ro facility Don’t seem to feel the pulse… L&T- the specialty of special purpose vehicles Adharma of opposition politics Shaming of Tamils by Tamil farmers at Delhi Lesson from Chandrababu Naidu Scientists urged to take up farmer-oriented research When the President was rendered homeless… When Ratan Tata visited SRM A rich pool of talent not utilised…. Telangana in top gear… Build close rapport with business leaders Valli, they are more marginalised Sweet news for TN sugar mills Where is Rajaji? Tough task taking states together Making ‘my Amaravati’... Gay abandon in pricing Return to king coal for urea... Computation of GDP – conundrums continue The rise and rise of KCP Measuring roof tops in terms of KW/MW Robber barons everywhere Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai Preserving for the future Quality education through the PPP mode Delhi is distant… Muffled voices for merit… Moily’s bold thrust Building loyalty through the stomach A C Muthiah – his munificent bequeaths to science The ‘Jayanthi Tax.’ Limit foreign borrowings to hi-tech, export potential projects... Polls and promises Silver Years of Madras Musings He continues the focus on social amelioration The Ports’ Pasha expands into Tamil Nadu CII projects higher growth… Gas is the way forward Insurance companies bleeding, yet no decision on increasing FDI limit! Vibrant Gujarat Delhi is distant Delhi returns to BJP The brown list of Venkitaramanan A friendly business group Revving up the manufacturing sector Permanent secretariat for TN GIM West Bengal: mindless malignancy Should we change the official year? Solar thermal shines… Towards speedy justice Engineering seats go abegging Excel Generators provide the vital back-up Small units prefers to remain small... The ‘Ayyo-yes’ is no more Kudos to NDTV... Wanted: a second airport for Chennai Tribute – M V Murugappan Cement prices continue to rise… ONGC at KG Basin GM Technology at last! Alexa – Talking Wikipedia A more liberated TN… …and of a popular trade leader Bihar – Nitish Kumar adopts the Lalu model An enemy’s enemy is a friend Fall in crude prices help in oil sector reform Maximising the micro pricing … Tatas moving out of urea production... When small is no larger beautiful.. Dr C Rangarajan returns to Chennai Colour-Chem’s colourful KRVS No Maha Koottani in TN... Align crops to agro climate endowments… Reliance’s TV – 18 ready to launch Tamil News Channel A think tank for Chennai Tribute F C Kohli - his concerns all embracing CRS, a jewel among managers, is no more. Naidu’s return augurs well for Seemandhra Recognition to role of NBFCs.... Marketing expert Balagopal is no more L&T: focus on infrastructure and more infrastructure… Sri Lanka votes for change Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated TN-leverage strength of BHEL, NLC... Five star activism stalls development activity Of course, Gujarat is vibrant Tatas moving out of urea production... Welcome thrust on trade in Modi’s foreign visits... Kulandai was a giant Mu Sigma – is no more Kinetic Karnataka A professional at the helm of IRDA... Infrastructure funding – lessons learnt A yen for wastage… Revive development banks... The balancing act Put expensive assets created to use... All eyes on Sankara Nethralaya Liberal imports idling indigenous capacities MHC should not return to its old indisciplined ways There was flood of milk. Reason: no milk commissioner! Mersal magnified Lalu’s envy, India’s pride Online not in line with brick and mortar businesses... Modi and the lady Paytm karo... Protest masters... Haul over the coal Auto components surge… More Shakti to resource mobilisation... He saved millions from starvation... The few handicaps... Land reclamation from sea appears cheaper! A proud Madrasi Remembering Indira Sivasailam... Like Hinduism: many paths to reach God... IPL type auction for VCs? Breaththrough in malaria control Inflation: are we emulating Argentina and Brazil? More Shakthi to Das’ elbow S V Raju – a ‘good’ true liberal Russi Mody – a tribute Shale gas and its shallow future Streamlining mandatory third party cover Quality silica from Neyveli Godspeed, Chief Minister JJ Diamond jubilee of Egmore Samskrt School Fortune for Indian Airlines This scant respect for Law Demise of a media baron... Funding the un-funded Whistle-Stop Tour of Raghuram Rajan Delhi Chalo... Why land prices zoom in TN? B H Kothari - a tribute For whom the MIDS bell tolls? GNS - 100: our first subscriber S Ramanathan – a versatile musician, musicologist No mega rail project for Tamil Nadu Readers' Mail Welcome GST Contrarian cousins Cleaning Ganga – relocate tanneries and install electric crematoria R Sridhar steps down as CEO of Shriram Capital Rahman at CIC to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Why this malaise in medical education? The sea- saw battle continues... Noble nonagenarians... Intellectual of rare qualities Poor quality of university VCs Modi storms Silicon Valley TN – agglomerate land holdings without alienating ownership Cutting the nose to spite the face Things happen by accident and not by design... PPP mode for upgrading Corporation Hospitals The rise and fall of Annamalai University A welcome initiative by the judiciary Rs.1600 crore paper board plant of TNPL Waning interest in public discussions… More tributes to GR Eternal support for capitalisation of PS banks Focus on quality of power - its only around 170-180V Tax agriculture Which side are you, Montek? China invests in India No engine for this car EEC at the National Media Centre Fortune 500 review TIAM turns a full cycle Road development slows down IAS invades NDDB... Naidu will soon build a new Hyderabad A Grand Finale for SN’s MS centenary at the US… Welcome changes that testify to Jayalalithaa’s return to health EVM is tamper-proof TGS- The king storyteller How Air-India loses customs... The nuclear option The Swadeshi Trump IPL - no surprise this scam
 
Revving up the manufacturing sector

For a couple of years now, there has been interest on the part of the policymakers and industry associations to increase the share of manufacturing sector in the GDP. The idea has been gaining momentum over the last three years. Speakers at the national convention of CII referred to the need to increase this share to 25 per cent of GDP. Presently, it is in the region of 14 per cent.

The experience of China in building a very strong manufacturing sector was often cited as a shining example. In recent years, China emerged a large manufacturer of a variety of goods. This was aided by the country opening up investments in the manufacturing sector. China developed a number of special economic zones for exports. It opened up investments, especially from the US, through liberal incentives. Large multinationals from the US and Europe, Japan and Korea were attracted by these incentives offered.  The major attractions included the ease of setting up and operating businesses and, most importantly, cheap labour. China also took care building a strong infrastructure in terms of roads, transport, port facilities… and offered other liberal incentives.

In a very short time, multinationals rushed to China and helped the country build a massive manufacturing base. The booming Chinese economy followed.  In quick time China emerged a strong economic power next only to that of the US. Chinese products gained in quality as a result of such investments and the cheap labour enabled the country to win custom for a vast range of products at low prices.

An immediate fall out of this is the huge surge in exports. In recent decades,  it is common sight to find in the US department stores several goods offered, carrying the label Made in China. Particularly pervasive is the share of a vast range of consumer goods including appliances and other items of daily use. In quick time such an experience also helped China upgrading its skills and win custom for more sophisticated goods.

 Unfortunately, a similar wave has not struck India largely because of the slow pace of reforms. Investment policies do not still attract major corporates across the globe to set up shop to produce a vast range of manufactured goods. This is sad in the light of the existence of several multinationals working in India for several decades. The several restrictions in doing business in India and the various clearances still required from the government and most importantly, corruption at the high places, have been major deterrents. Unlike China, infrastructure is also extremely weak. Ports are still congested. Road infrastructure to carry goods from and to the port is still poor and the cost of basic requirements like power is pretty high, besides being uncertain. Tamil Nadu, which used to be in the forefront of attracting such investments for several decades, offers an instance of this deficiency: over the last two years, power shortages have been rampant forcing industry to take recourse to power generation through diesel gensets which shoots up the cost. Simultaneously, there has also been a huge increase in the cost of grid power. Cost of power in China is estimated to be less than half of that charged for Indian industry. Of course, there is also the uncertainty of supplies and unsteady voltage. While the government and CII have been stressing the need to take the share of the manufacturing sector to 25 per cent of GDP, the lack of skills, lack of a strong work culture and the absence of training facilities come in the way. Sadly, education even at engineering colleges and higher institutes of learning do not prepare the students for ready employment in industry.  

 The target for raising the share of the manufacturing sector to 25 per cent of GDP thus appears tall. Even for a highly developed country with a strong manufacturing base like Germany, the share is just around 23 per cent; for countries in south-western Europe like France, Spain, Portugal and Belgium, the share is less than 15 per cent of GDP.

IE has been suggesting serious efforts to improve the share of agriculture in the GDP. India has good natural endowments in terms of arable land and agriculture season extended round the year. By proper policy back up it will be possible to enable the agriculture sector to emerge strong which in turn can also support a strong industrial sector.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com