Future is bleak in manufacturing sector

India is 5th largest manufacturing hub in the world, yet ranked 30th in Global Manufacturing Index 2018. These figures suggest that we are the masters of haphazard production and manufacturing

NH Photo by Mahendra Pandey
NH Photo by Mahendra Pandey

Mahendra Pandey

It is just a reminder that India is the 5th largest manufacturing hub in the world, yet ranked 30th in Global Manufacturing Index 2018 and further dips at 44th place when considered for "best positioned to capitalise on 4th Industrial revolution". Both the Indexes were published recently by World Economic Forum which includes the data of 100 selected countries. These figures simply indicate that we are the masters of haphazard production and manufacturing and do not follow international norms.

Top five countries in Global Manufacturing Index are Japan, South Korea, Germany, Switzerland and China. Another list, i.e. Best Positioned to Capitalise 4th Industrial Revolution, starts with America followed by Singapore, Switzerland, United Kingdom and the Netherlands. China is placed at 25th position in the second list.

The Industrial revolution began during 18th Century in Europe and America. Its second phase started in 1870 and lasted upto World War I. Third phase was use of digital technology in 1980s and still going on. Fourth revolution is yet to come with inclusion of robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, 3-D printing and automotive vehicles.

India is 5th largest manufacturer in the world with the cost of 450 US$ in 2016. During the last three decade it grew at the rate of almost 7 per cent every year and share in country's GDP remained at 16-20 per cent. The average value of manufacturing sector remained at INR 4269.80 billion during 2011 - 2017. The government expects that by 2022 its share in GDP would grow to be 25 per cent.

As per the report of WEF, major drawbacks of Indian manufacturing sector are human capital (63rd) and sustainable resources (96th). In global trade and investment, institutional framework and economic complexity we are placed at 55th, 54th and 48th place respectively. Despite digitisation promotion by the government, India is placed at 86th place in context of internet users. We are mediocre in R&D expenditure, scientific publications and patent applications at 43rd, 66th and 54th place respectively. In global trade and trade tariffs we are at 85th and 94th place respectively. We are 90th in respect of female workforce, 72nd in infrastructure and 96th in regulatory efficiency.

WEF says, "India is the 5th-largest manufacturer in the world—with a total Manufacturing Value Added of over US$ 420 billion in 2016– and ranks 48th in economic complexity. Over the last three decades, India’s manufacturing sector has grown by more than 7 per cent per year, on average, while accounting for between 16 per cent to 20 per cent of India’s GDP. Home to the second-largest population in the world and one of the fastest growing economies, the demand for Indian manufactured products is rising. India has room for improvement across the Drivers of Production, except for Demand Environment where is ranks in the Top 5. Two key challenges for India are Human Capital and Sustainable Resources. India needs to continue to raise the capabilities of its relatively young and fast-growing labour force. This entails upgrading education curricula, revamping vocational training programs and improving digital skills. Furthermore, India should continue to diversify its energy sources and reduce emissions as its manufacturing sector continues to expand."

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