Towards a Competitive Manufacturing Sector By Rajiv Kumar Director and Chief Executive, ICRIER
Outline <ul><li>Aggregate Manufacturing Scenario </li></ul><ul><li>Regional Disparities </li></ul><ul><li>Employment Gener...
<ul><li>Aggregate Manufacturing Scenario </li></ul>
Significance of Key Sectors in the Economy
Cross Country Comparison
Composition of Manufacturing Sector Across Countries
Growth of Indian Industry
Growth of Components of Manufacturing Sector
Performance of the Manufacturing Sector
Comparison of the Manufacturing with Other Core Sectors
Comparison of the Manufacturing with Other Core Sectors
Change in Composition of the Manufacturing Output
<ul><li>Regional Disparities in India </li></ul>
Statewise Decomposition of Manufacturing Output
Contribution of States to Output and Employment in Manufacturing Decomposition of Output Decomposition of Employment
 
 
 
 
<ul><li>Performance of the Unorganized Sector </li></ul>
Share of Unorganized and Organized Manufacturing in Valued Added and Employment (2000-01) Source: NSSO 56 th  Round and An...
Gross Value Added Per Worker in Unorganized and Organized Manufacturing (2000-01) 2.98 0.16 Total 2.07 0.15 Total (Less Pr...
<ul><li>Employment Generation </li></ul>
Employment Growth Rate in Manufacturing Sector Note: * Period covered for Unorganized Manufacturing is 1989-90 to 2000-01....
Employment in Organized Manufacturing Sector
Change in Labor Intensity in Top 5 Labour Intensive Goods
Export Performance of Labor Intensive Industries
<ul><li>Export Performance </li></ul>
Share of Manufacturing Exports to India's Total Merchandise Exports
Manufacturing Exports: Cross Country Comparison
Levels of Manufactured Exports Across Countries
High Technology Exports
Change in Composition of Indian Manufactured Exports
<ul><li>Transition to Mass Manufacturing  </li></ul>
Value Added by the Manufacturing Sector in Some Major Developing Countries (2004)
Per Capita Value Added by the Manufacturing Sector in Some Major Developing Countries (2004)
Scale of Production of Major Commodities Across Countries
Scale of Production of Major Commodities Across Countries
Scale of Production of Major Commodities Across Countries
Scale of Production of Major Commodities Across Countries
Size of Labor Force in Manufacturing Sector
Possible Routes to Achieving Mass Manufacturing in India <ul><li>Route I   :  Improve Export Market Share </li></ul><ul><u...
Spending on R & D as a percentage of GDP (2003)
Researchers Involved in R&D (2003)
Use of Foreign Technology (2004)
Number of Resident Patent Filed (2004) Source: World Intellectual Property Organization 4.4 116.19 2188.96 Korea 0.68 17.7...
<ul><li>Policy Recommendations </li></ul>
Policy Recommendations <ul><li>(i) Remove Entry Barriers </li></ul><ul><li>  1.  Heavy hand of petty functionaries </li></...
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Towards A Competitive Manufacturing Sector

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  • Towards A Competitive Manufacturing Sector

    1. 1. Towards a Competitive Manufacturing Sector By Rajiv Kumar Director and Chief Executive, ICRIER
    2. 2. Outline <ul><li>Aggregate Manufacturing Scenario </li></ul><ul><li>Regional Disparities </li></ul><ul><li>Employment Generation </li></ul><ul><li>Unorganized Sector </li></ul><ul><li>Export Performance </li></ul><ul><li>Transition to Mass Manufacturing </li></ul><ul><li>Policy Recommendations </li></ul>
    3. 3. <ul><li>Aggregate Manufacturing Scenario </li></ul>
    4. 4. Significance of Key Sectors in the Economy
    5. 5. Cross Country Comparison
    6. 6. Composition of Manufacturing Sector Across Countries
    7. 7. Growth of Indian Industry
    8. 8. Growth of Components of Manufacturing Sector
    9. 9. Performance of the Manufacturing Sector
    10. 10. Comparison of the Manufacturing with Other Core Sectors
    11. 11. Comparison of the Manufacturing with Other Core Sectors
    12. 12. Change in Composition of the Manufacturing Output
    13. 13. <ul><li>Regional Disparities in India </li></ul>
    14. 14. Statewise Decomposition of Manufacturing Output
    15. 15. Contribution of States to Output and Employment in Manufacturing Decomposition of Output Decomposition of Employment
    16. 20. <ul><li>Performance of the Unorganized Sector </li></ul>
    17. 21. Share of Unorganized and Organized Manufacturing in Valued Added and Employment (2000-01) Source: NSSO 56 th Round and Annual Survey of Industries 75.24 24.76 13.85 86.15 Total 94.97 5.03 60.21 39.79 Others 25.38 74.62 2.87 97.13 Furniture 94.71 5.29 63.53 36.47 Motor Vehicles 86.29 13.71 38.54 61.46 Electrical Machinery and Apparatus 86.41 13.59 36.09 63.91 Machinery and Equipment 56.11 43.89 12.13 87.87 Fabricated Metals 96.86 3.14 76.09 23.91 Basic Metals 67.95 32.05 10.22 89.78 Other Non Metallic Non Mineral Products 82.31 17.69 35.99 64.01 Rubber and Plastic Products 97.32 2.68 48.90 51.10 Chemical and Chemical Products 99.41 0.59 68.13 31.87 Coke, Refined Petroleum and Nuclear Fuel 77.47 22.53 22.60 77.40 Paper, Publishing and Printing 6.70 93.30 0.71 99.29 Wood and Wood Products 60.84 39.16 22.29 77.71 Leather and Leather Products 56.63 43.37 11.35 88.65 Textiles and Wearing Apparel 64.76 35.24 12.57 87.43 Food Beverages and Tobacco Organized Unorganized Organized Unorganized Sectors Gross Value Added (Percent) Workers (Percent)
    18. 22. Gross Value Added Per Worker in Unorganized and Organized Manufacturing (2000-01) 2.98 0.16 Total 2.07 0.15 Total (Less Products with VA<10% in Unorg. Sector) 4.59 0.37 Others 2.50 0.22 Furniture 4.19 0.41 Motor Vehicles 3.88 0.39 Electrical Machinery and Apparatus 3.98 0.35 Machinery and Equipment 2.18 0.23 Fabricated Metals 4.34 0.45 Basic Metals 2.85 0.15 Other Non Metallic Non Mineral Products 3.15 0.38 Rubber and Plastic Products 6.91 0.18 Chemical and Chemical Products 18.59 0.24 Coke, Refined Petroleum and Nuclear Fuel 3.44 0.29 Paper, Publishing and Printing 1.01 0.10 Wood and Wood Products 1.21 0.22 Leather and Leather Products 1.51 0.15 Textiles and Wearing Apparel 1.56 0.12 Food Beverages and Tobacco Organized Unorganized Sectors Gross Value Added Per Worker (Rs. Lakhs)
    19. 23. <ul><li>Employment Generation </li></ul>
    20. 24. Employment Growth Rate in Manufacturing Sector Note: * Period covered for Unorganized Manufacturing is 1989-90 to 2000-01. ** Period covered for Organized Manufacturing is 1990-91 to 2003-04 Source: Annual Survey of Industries and NSS reports, various years 3.88 1.29 Other Manufacturing (Including Wood) 0.02 1.44 Transport Equipment 0.82 4.1 Machinery and Equipment 2.05 2.89 Metal Products -0.91 3.9 Basic Metals 0.82 0.65 Non-Metallic Mineral Products 2.02 0.87 Chemicals and Products 0.1 1.69 Paper and Products 1.21 3.05 Textiles and Leather 0.96 0.9 Food, Beverages and Tobacco Organized Unorganized Major Industrial Groups
    21. 25. Employment in Organized Manufacturing Sector
    22. 26. Change in Labor Intensity in Top 5 Labour Intensive Goods
    23. 27. Export Performance of Labor Intensive Industries
    24. 28. <ul><li>Export Performance </li></ul>
    25. 29. Share of Manufacturing Exports to India's Total Merchandise Exports
    26. 30. Manufacturing Exports: Cross Country Comparison
    27. 31. Levels of Manufactured Exports Across Countries
    28. 32. High Technology Exports
    29. 33. Change in Composition of Indian Manufactured Exports
    30. 34. <ul><li>Transition to Mass Manufacturing </li></ul>
    31. 35. Value Added by the Manufacturing Sector in Some Major Developing Countries (2004)
    32. 36. Per Capita Value Added by the Manufacturing Sector in Some Major Developing Countries (2004)
    33. 37. Scale of Production of Major Commodities Across Countries
    34. 38. Scale of Production of Major Commodities Across Countries
    35. 39. Scale of Production of Major Commodities Across Countries
    36. 40. Scale of Production of Major Commodities Across Countries
    37. 41. Size of Labor Force in Manufacturing Sector
    38. 42. Possible Routes to Achieving Mass Manufacturing in India <ul><li>Route I : Improve Export Market Share </li></ul><ul><ul><li>No sector where India enjoys a big share of exports </li></ul></ul><ul><ul><li>Lack of FDI </li></ul></ul><ul><ul><li>Role of MNCs </li></ul></ul><ul><li>Route II : Expand the Indigenous Market Base </li></ul><ul><ul><li>Small size of the domestic market </li></ul></ul><ul><ul><li>Low purchasing power </li></ul></ul><ul><li>Need to develop High Quality and Low Price products </li></ul>
    39. 43. Spending on R & D as a percentage of GDP (2003)
    40. 44. Researchers Involved in R&D (2003)
    41. 45. Use of Foreign Technology (2004)
    42. 46. Number of Resident Patent Filed (2004) Source: World Intellectual Property Organization 4.4 116.19 2188.96 Korea 0.68 17.7 645.44 USA 0.22 2.3 6.65 India 0.71 9.37 50.75 China 0.29 2.81 21.16 Brazil 0.56 2.32 28.41 Argentina Patent Filings per $Million R&D Expenditures Patent Filings per $Billion GDP Patent Filings per Million Population
    43. 47. <ul><li>Policy Recommendations </li></ul>
    44. 48. Policy Recommendations <ul><li>(i) Remove Entry Barriers </li></ul><ul><li> 1. Heavy hand of petty functionaries </li></ul><ul><li> 2. Clearances </li></ul><ul><li> 3. Processes </li></ul><ul><li>(ii) Remove Exit Barriers </li></ul><ul><li>(iii) Weaken distinction between organized and unorganized sector </li></ul><ul><li>(iv) Labour market reforms </li></ul><ul><li>(v) Improve labour conditions and real wages </li></ul><ul><li>(vi) Education Sector Reforms </li></ul><ul><li>(vii) Infrastructure </li></ul><ul><li>(viii) Foreign Direct Investment </li></ul>
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