Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Is the revival for manufacturing sector on cards?
Tue, 9 Sep Pre-Open

Notwithstanding the current slowdown, both India and China have grown at an impressive rate in the past. But the contributors to this growth have been different. While China has established a strong foothold in manufacturing, India's growth has been fuelled by the services sector. While China has shown an impressive growth on this front, India's vast potential in manufacturing has remained unutilized. In terms of percentage to GDP, manufacturing cuts a sorry figure. At just 13% it has a much smaller share of the economy than China (32%) and other countries Vis; Malaysia and Indonesia (24%).

India is now looking to make improvements in manufacturing and production which will provide a further fillip to GDP growth. Increasing manufacturing share has been an area of focus since some time; the new government too has laid emphasis on improvements on this front.

During the recent visit of Prime Minister Narendra Modi to Japan, he too emphasized on manufacturing. In his speech he said - "Bharat is ready to invite you. Make in India whatever facilities you want, they are there." Cheap labour, skilled manpower, ease of business and liberalised environment are some of the factors that Mr. Modi has promised for.

Given the abundance of cheap labour in the country, manufacturers from all parts of the world have been attracted to India and have been setting up plants in the country in recent times. Certain cities such as Pune, Chennai and the state of Gujarat have also emerged as major industrial hubs for various sectors including automobiles and auto ancillaries. Various new special economic zones have also sprung up to bolster manufacturing.

However, now the government needs to look into some very important issues. The manufacturing sector in India is facing several structural constraints in the form of poor infrastructure, regulatory hurdles, slow reforms, red tape and corruption.

While we too, believe in India's potential on capitalizing on cheap labour and accelerating manufacturing growth, the government also needs to regularly check upon the polices and their implementation. The government will have to work towards ensuring that there is a major overhaul in laws in keeping with the changes in the modern economic and industrial landscape. Only then one can be hopeful of, India becoming a world class manufacturing behemoth.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Is the revival for manufacturing sector on cards?". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms