MANUFACTURING SECTORS AND OVERALL GROWTH OF ECONOMY

BY BHUVANESHWARAN BALAJI

MANUFACTURING SECTOR:
Textiles, oil & gas, automobile ,power etc. Contributes to 16% of our GDP. Service sector contributes to 62.5% of our GDP. The IIP is negative for the last quarter. Manufacturing sector has to grow. The budget 2013-14 aims to create 100 million jobs and GDP to 25% by 2025.

INDUSTRY INVESTMENT:
Measure : Cabinet Committee of Investment to monitor major investment decisions. Speedy approval of projects Impact : More investment. High FDI.

INVESTMENT INCENTIVE:
Firms can claim allowance of 15% on investment in new plant and machinery valued at Rs 100 crore in addition to depreciation. Next two fiscal years.

Impact:
Investment will increase.

ELECTRONICS INDUSTRY:
Duty waiver for importing plant and machinery used to make semiconductor fabrication units.

Impact:
Boost local electronic manufacturing units . Attraction of MNC to India.

INDUSTRIAL CORRIDORS:
Corridors from Bengaluru to Chennai and from Bengaluru and Mumbai. Contract for 3000 KM of road and setting an regulator.

Impact:
New wave of industrialization and urbanization to accelarate growth. Helps regulate contracts & dispute solving.

COAL INDUSTRY:
PPP model in coal mining soon. Boosts supply of coal for power generation. Customs duty for steamed and bituminous coal to be uniform at 2%. Power generation will get costlier from imported coal. Tata power , adani , lanco will get affected.

OIL AND GAS:

Move from profit to revenue sharing regime. Multiply exploration risks. Not favoured by oil companies. Pricing for shale and natural gas.

LEATHER INDUSTRY:
Duty reduction in importing machinery for producing leather goods and footwear. Export gets increased.

AUTOMOBILE:
Luxury cars to cost more import duty increased from 75 % to 100%. Ex : land rover, aston martin, porsche etc.. Excise duty for non taxi SUV increased from 27% to 30%. M&M is affected greatly than others. Tax incentive for hybrid and electric cars, aircraft manufacture, repair and overhaul units and ship building industry.

TEXTILE INDUSTRY:
Zero excise duty for branded readymade garments. Garments to become cheap.

MSMES:
Tax benefit for three years from their transformation to larger organisations. Encourages growth and job creation.

POWER SECTOR:
To improve power production. Zero customs duty on import of power producing machineries. Encourages new private players to enter power sector.

ULTIMATE GOAL
Our goal is higher growth leading to inclusive and sustainable development Growth rate is always a challenge for our economy Growth will lead to inclusive development , without growth there will be no inclusiveness and development
CURRENT ECONOMIC GROWTH OF INDIA Our economic growth rate have slowed down from 3.9% in 2011 to 3.2 % in 2012 Our Economy slowed after 2010-11, one of the biggest reason for that is Recession

GROWTH RATE ESTIMATION

CSO 5% RBI 5.5 % FM 8 % Our Finance Minister is very optimistic about our potential growth rate Ahead of polls this budget shines weakly but fails to crackle

ASPECTS OF GROWTH

ASPECTS OF GROWTH
In the last decade, growth has increasingly come from the services sector, whose contribution to overall growth of the economy has been 65 percent, while that of the industry and agriculture sectors has been 27 per cent and 8 percent respectively The contributions of these sectors to the overall growth of the economy from 2003-04 to 2012-13 The two larger sectors are important to overall growth In the high growth years of 2005-06 to 2007-08 as well as in 200910 and 2010-11, the rate of growth of both the industry and services sectors was over 9 percent

ASPECTS OF GROWTH
Within the industry sector, the manufacturing sector in particular, outperformed most other sectors of the economy in these years Its growth averaged 11.6 per cent between 2005-06 and 200708 and 10.5 per cent for the years 2009-10 and 2010-11 It is clear from the foregoing analysis that for growth to be strong, the contribution from the industry sector and in particular from the manufacturing sector, has to increase in the years to come

GROWTH IN VARIOUS SECTORS

(MSME) Micro, small and medium enterprises :
(MSME) Micro , small and medium enterprises will tend to restrict their growth due to various benefits provided Even after the transformation, the benefits enjoyed by them will remain with them upto three years after they grow out of the category in which they obtained the benefit

AGRICULTURE
The growth rate of agriculture was increasing in 11th plan year which was around 3.6 % Allocation of Rs 27,049 crores to the Ministry of agriculture , an increase of 22 % over the RE of the current year

HEALTH CARE
In order to encourage ayurveda , unani , siddha and homoeopathy through the National Health Mission, an allocation of Rs 1069 crores is being proposed to be made to the department of AYUSH

PEOPLE WELFARE
Women have a fair share this year - 1000 crores
Nirbhaya fund Safety and Empowerment of women Womens bank PSB and employee predominantly women National Skill Development Corporation - 1000 crores

Training ,development and evaluation Motivation of youth by providing certificates and rewards