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Home arrow Business News arrow 12-14% Growth Rate in Manufacturing Sector is Easily Doable: Ajay Shankar, NMCC
12-14% Growth Rate in Manufacturing Sector is Easily Doable: Ajay Shankar, NMCC Print E-mail
Written by Ganesh   
Thursday, 15 December 2011
Mumbai: There was a time when it was believed that India cannot do manufacturing. Now we have reached a stage where our National Manufacturing Policy talks about 12-14% growth rate, 100 million jobs and increasing share of manufacturing in GDP to 25% by 2025, said Mr Ajay Shankar, Secretary, National Manufacturing Competitiveness Council.

"If you look at the past, you see that we had touched 12-14% growth in a few short periods. The challenge is to make it steady and sustainable for 10 years. I think this is very much doable," Mr Shankar added.

He opined that considering that we have firms across the spectrums that have shown themselves to be globally competitive and serious, higher aspirations by the government on this front is obvious.

He was speaking at the Confederation of Indian Industry’s (CII)  flagship event the 10th Manufacturing Summit 2011 in Mumbai, with the theme "Indian Manufacturing at a Point of Inflection: Challenges and Responses."

Mr Shankar further observed, "The Policy recognizes that land is an issue and hence talks of making land-banks." He suggested releasing these land banks with sick and unproductive units and using those for productive purposes, besides providing external facilities like infrastructure.

Addressing the session, Mr Jamshyd N Godrej, Past President, CII & Chairman - CII Manufacturing Summit 2011, said, “The challenges are tremendous, viz. lowering of growth rate, delaying of important legislations including the one on GST, infrastructure, skill development etc. Yet this is also an inherent opportunity and we should see internally on how we can raise our standards, become green and improve quality to take advantage of the situation.” He added, “GST is an important legislation which we have all recognized as essential for improving tax and cost structure in manufacturing. Yet there is a lack of information about GST and we need to move rapidly to spread awareness on its benefits.”

Prof Pankaj Chandra, Director, Indian Institute of Management, Bangalore observed, “Manufacturing does not happen in the Centre but in the states and in individual firms. So while talking about manufacturing policies we will have to deal with states and capabilities of firms.” He added, “The uniqueness of Indian manufacturing sector lies in practices that create high volume, high variety, high precision and are flexible. A lot of successful firms lie in this zone of excellence and follow these practices. The challenge lies in getting other firms to this zone. In this context, he suggested building levels of enterprises where a considerable number of large, medium and small enterprises thrive to make up a sustainable eco system. This will change the manufacturing industry and the nation dramatically.” Prof Chandra further recommended that one of the action points for the industry would be to create three offices viz. ‘Office for Manufacturing Data and Productivity’, ‘Office for Commercialization of Technology’ and ‘Office for Technology Diffusion’.

Speaking at the Summit inaugural, Mr. Ajay Piramal, Chairman, Piramal Healthcare India Ltd. shared his concerns saying, “Today to start a manufacturing unit, you have so many impediments right from acquiring land to environmental approvals. This poses constraints in expanding capacity. It takes five years to start an industry in India while it takes two in China. The drop in production that we see can be attributed to these problems.” He also indicated that there are opportunities galore for a bright future but we are not doing enough. We need to bridge the infrastructure deficit in the country and create the right policy framework. He observed that banks don’t have adequate capital and hence FDI needs to be encouraged. On an optimistic note, he said, “Globally growth is slowing down. India is looked upon by people as a country with high quality manufacturing. We thus have several opportunities but we also have to address the problems.”

A background note on the Summit co-authored by The Boston Consulting Group (BCG) and CII was released by Mr. Ajay Shankar during the Summit. Mr. Arindam Bhattacharya from BCG briefed the august audience about the background paper. It outlines the aspirations, challenges and trends that would shape the Indian manufacturing sector. It also discusses the National Manufacturing Policy and views that it may work as a “game changer” for the industry if implemented aptly.

Mr Pradeep Bhargava, Deputy Chairman, CII - Western Region & Managing Director, Cummins Generator Technologies India, talked about the manufacturing industry standing up for itself. He said, “Once we were shy to admit that we worked for the manufacturing sector while today the sector is flexing its muscles”. Mr Bhargava opined that when it comes to issues like innovation, competitiveness, going green and skill development, industry has to be self reliant and not depend on the government.

 
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