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Manufacturing to contribute 22% of GDP by 2015: FICCI
15 Feb '07
2 min read
The stagnating share of manufacturing sector in the GDP (Gross Domestic Product) at 15% could cross 22% mark by 2015 if the Government were to address five principal challenges facing the sector on priority basis, according to projections made by FICCI. These challenges are bridging the skill gap for the sector, speedy development of infrastructure, reducing transaction cost, reforming labour laws and incentivising innovation and technology.
Expecting an average growth rate of 9% per annum for GDP over the next 8 to 10 years, FICCI said that the manufacturing sector could witness the growth rate of over 14% per annum, which would imply that its share would be over 22% in the GDP by 2015 (See Attached Table).
Buoyed by the 11% plus growth rate of manufacturing sector in the recent past, FICCI said that achieving 14% growth rate per annum for the manufacturing is possible. In fact, FICCI observed, in 1996-97 manufacturing sector had grown at 15% over and above the 12% growth in the previous year. This only indicates the growth potential of the sector and if appropriate policies for the sector are in place it can grow at 14% per annum.
FICCI pointed out that despite being the second most populous country, there exists a serious gap between the availability of skilled manpower and the requirement of Indian industry. For instance, the textile and clothing sector will have the highest manpower requirement in the entire manufacturing sector in the next few years.
Around five million people will be required mainly at the basic skill level in the sector out of which four million are required for the garment sector only. This will require massive expansion and modernization of training institutes across the country that can be done with PPP Scheme (Public Private Partnership). Similarly, availability of technical manpower is a key constraint to the growth of leather sector also in India.
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Expecting an average growth rate of 9% per annum for GDP over the next 8 to 10 years, FICCI said that the manufacturing sector could witness the growth rate of over 14% per annum, which would imply that its share would be over 22% in the GDP by 2015 (See Attached Table).
Buoyed by the 11% plus growth rate of manufacturing sector in the recent past, FICCI said that achieving 14% growth rate per annum for the manufacturing is possible. In fact, FICCI observed, in 1996-97 manufacturing sector had grown at 15% over and above the 12% growth in the previous year. This only indicates the growth potential of the sector and if appropriate policies for the sector are in place it can grow at 14% per annum.
FICCI pointed out that despite being the second most populous country, there exists a serious gap between the availability of skilled manpower and the requirement of Indian industry. For instance, the textile and clothing sector will have the highest manpower requirement in the entire manufacturing sector in the next few years.
Around five million people will be required mainly at the basic skill level in the sector out of which four million are required for the garment sector only. This will require massive expansion and modernization of training institutes across the country that can be done with PPP Scheme (Public Private Partnership). Similarly, availability of technical manpower is a key constraint to the growth of leather sector also in India.
Click here to read more:
Federation of Indian Chambers of Commerce and Industry, India
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