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Home arrow News arrow Business News arrow Manufacturing, key to inclusive and sustainable growth: Ajay Shankar
Manufacturing, key to inclusive and sustainable growth: Ajay Shankar Print E-mail
Written by Anand   
Tuesday, 23 September 2008
Mumbai: "The importance of manufacturing sector is not completely understood and appreciated. Manufacturing sector which currently constitutes 18% of GDP could rise to almost 30%. Challenge is to get three sooner than later", said Mr Ajay Shankar, Secretary, Department of Industrial Policy & Promotion Ministry of Commerce & Industry Government of India at the 7th Manufacturing Summit on 'Building manufacturing, building India' organized by the Confederation of Indian Industry (CII) in Mumbai yesterday.

Stressing the importance of inclusive growth, Mr Shankar pointed that in order to ensure inclusive and sustainable growth, it was pertinent to succeed in manufacturing. His optimism on the growing share of manufacturing in the GDP stemmed from two factors: 1. in the previous year growth rate of manufacturing was along with the service sector and 2. Even if there is a downturn, the investments that are taking place are primarily in manufacturing.

The growth in manufacturing, he said is reflected by the large inflows of FDI into the country vis-à-vis the FII inflows. While international confidence in India is high, the Indian manufacturing sector, Mr Shankar said, faces the key challenges of skill shortage, infrastructure, availability of land and funding for start-ups and small enterprises.

Talking about the need for continuous innovation, he said we need globally cost effective manufacturing for which innovation is the key. "Need is for both government and enterprises to work together in public private partnership", concluded Mr Shankar.

Presenting a global perspective at the CII Summit was Prof Arnoud De Meyer, Director- Judge Business School University of Cambridge who said that requisites to take Indian manufacturing sector to the next level were focus on real productivity improvements by introducing global practices and innovation in process systems, development of robust vendor network clusters, commitment to fugal engineering and integration of manufacturing with service. "We must avoid the generalization that India can rely on cheap labour and for it to succeed in manufacturing the need is to innovate in processes, systems, capital equipment and products.

Prof Meyer laid down eight challenges to the Indian manufacturing sector. "Competition, need to increase R&D spending by private enterprises, continued skill development, more early stage funding, information flows between companies, commercialization  of domestically developed knowledge, tapping overseas Indian community, investment in inclusive innovation and creative and value adding imitation are required to be focused on", said the Speaker.

"There are changing paradigms in the manufacturing sector in the shape of changing definition of manufacturing, innovation and change in the shape of enterprises - from single headed enterprises to networked enterprises and move from control to coordination" highlighted Mr Arun Maira, Senior Advisor The Boston Consulting Group at the Summit.

In his address, Mr Jamshyd Godrej, Chairman CII Manufacturing Summit & Past President CII presented the theme of the Summit as taking manufacturing to the next level and the role of manufacturing in changing the face of India. "Issue is about globalization and translating innovation in a practical way", said Mr Godrej. Highlighting the importance of being green, Mr Godrej stressed that there was opportunity worth $ 500 bn over the next five years and the manufacturing sector had a crucial role to play in translating this opportunity into profits.

Earlier, in his welcome address Mr Banmali Agrawala, Chairman CII Western Region emphasized that manufacturing not only provides direct employment but creates host of indirect opportunities and the time has now come to find innovative solutions in this sector. "There is no country which can so efficiently use capital like India", concluded Mr Agrawala.

 
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