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Industry dwindling, Centre must come to the rescue
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Bikky Khosla | 17 Feb, 2015
All is not well with Indian industry. Our exports fell over 11 percent y-o-y in January, the steepest decline in two-and-a-half-years. December industrial production rose only 1.7 percent against 3.9 percent in the previous month. For the three-month period ended December 2014, corporate India's annual profit growth hit the lowest in five quarters. These key data-sets give a grim picture of the state of the Indian industry.
With the release of the last week's dismal foreign trade data, it has become quite clear that we will miss this year's export target of US$ 340 billion. Experts are of the view that low global demand is the main cause behind this export slowdown, but I think domestic factors have also played some spoilsport, particularly high cost of credit and lukewarm government support to the micro, small and medium enterprises which form a major part of the export sector.
Meanwhile, industrial growth slowed in December with manufacturing sector performing sub-par. These findings go somewhat against the recently released new-series GDP figures showing 5.3 percent rise in manufacturing in 2013-14 against contraction as per the older series. In addition, the fall in imports of machinery, project goods and materials like chemicals, ferrous metals, precious and semi-precious stones in December is a worrying signal.
Another recent report adds that corporate India's earnings sharply fell in the October-December 2014 period. This is the worst performance in five quarters, with net profit of 2,941 companies falling nearly 17 percent and their sales growth slowing to a twelve-quarter low. This level of performance again by no way reflects the high growth of the economy as shown by the revised data.
Ahead of the Budget and the Foreign Trade Policy it is the right time for the government to give some serious thought to tackle these problems. It is true that several reform measures have been introduced in the last few months, but till now no substantial difference has been felt in the real business environment. The industry indicators clearly suggest that far more radical changes are required to prevent potential damage to the economy. Reforms must be what work for the industry.
I invite your valuable opinions.
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lack of purchasing decisions by the buyers???
satish kumar | Tue Mar 3 04:36:49 2015
we are Loss in Sales and are facing the pressure from last May 2014 onwards. Not only us but the entire group of friends in the furniture industry are just scraping through.. Hope we see the market trends upwards soon with new commercial projects...
An American's observation -- India needs to focus on quality
Carl | Fri Feb 20 14:39:37 2015
I love India and the people I've been privileged to know there. With all due respect I'd like to share some observations as an American who has worked with Indians on a couple of occasions as well as things my wife has noticed while teaching women a trade. It seems difficult to get Indians to understand the concept of quality. My wife was continually challenged by this. The people she has worked with seem to want to quickly complete a project even with poor quality and move on to the next. I noticed similar things with quality of craftsmanship. Our standards in the US may be too high but never the less, if India wants the Western world to be a customer, improved quality needs to be understood and practiced.
SME Hurdles
Ashwin Shetty | Thu Feb 19 07:22:01 2015
The SME sector is not doing well because the owners are not able to concentrate on the most important activities in industry i.e Sales, Production. Their attention is always taken up by over zealous tax authorities ( keeping them embroiled in litigation) and bankers (who apart from high interest rates also overcharge customers without knowledge). So the entrepreneur with limited resources is unable to hire expert help on these matters has to handle them personally.
Apart from this Large Govt buyers are only imposing new restrictions thru tender qualifying criteria to ensure that SMEs stay supplying small orders and get no piece of the larger procurement pie.
Also the make in India seems to be to ask foreign players to set up shop here rather than encourage local existing shops to upscale and update.
Industry dwindling
Pepita Ridgeway | Wed Feb 18 20:47:13 2015
This is because customer service is very bad in comparison to other countries. Buyers have pressures and deadlines too. I can get a product from China in 4 days. I can even get my Indian contacts to return e-mails.
Govt always think about big cos
Sanjeev Dad | Wed Feb 18 17:27:22 2015
Our main problem is that center always think about big investment and always make favorable policy for Big investment companies. Our all problem is related to this policy. Because of this Center thinking about big companies and left SME and MSME to state government. That's why our basic structure of SME and MSME is near to die. Center always make favorable export import policy for big companies so why our all basic raw material like copper, zinc, Iron, PVC etc. price is 10 to 15% higher then international price so we cant export finished goods even we cant compete cheap import from Chinese companies. Center export incentive policy giving same benefit on raw material and finished goods so our all problem related to Center export import tax policy.
As i know both congress and BJP party election funding coming from these big companies so center government always making favorable policy for them. we are writing about this since 2011. we raise this issue so many platform but every where same answer we will check and reply you soon. As we know Indian economy is collapsing and there is no hope. Center government never hear voice of SME.
Rural based industries
Samir Banerjee | Wed Feb 18 08:01:32 2015
We all talk about to boost small, medium & large industry, but no one explain what kind of Industry India needs for over all growth. It is heartening the way we are destroying our agriculture base by encroaching land for Real Estate & Industry, the days are not too far, when our all income would be spent to import food grains. Still big think tanks could not or might be intentionally not understanding the only way to bring economy back, if main focus diverted to agriculture & agro based industries. Even as per available data a huge foreign currency can be earned by way of export of flowers & various fruits, fisheries etc. But no, we are all adamant to make this planet a concrete jungle and without any yield. We must engage 70% of our rural population by creating road map and encourage investment in Rural Based Industries. It is our mind set, we all think only Engineering Industry can bring economic growth and generate employment, but country like India should penetrate into agriculture based industry. We are only concern to produce more & more automobiles, after all for whom? It is still not too late, we all must think positively to change the concept of Industry. MAKE IN INDIA AND MAKE FOR INDIA.
Gopinathen Pillai | Wed Feb 18 05:54:58 2015
It is largely due to the sluggish export markets in the OPEC countries due to poor oil prices and the perceived economic downturn internationally. One should also compare the lower import costs along with the sluggish exports.
Naturally, growth in the domestic production will go down especially in the
exports oriented sectors.
With the domestic prices of industrial goods, especially in the white goods sector, coming down in an atmosphere of
intense competition from among the producers, the industrial growth is
bound to suffer. Perhaps one way
to spur the growth in the manufacturing
sector is to increase the money supply
and thereby enhance the purchasing power
of people in the rural areas.
Dwindling industrial scenario
Srivathsan.R. | Wed Feb 18 03:28:27 2015
What is written in editorial is absolutely true. The new govt has made many reforms. But it is not percolating the mid of down the line person. They work for salary and not for growth of India. Still they have the BRITISH DNA and sculltle or delay all proposals, A time frame and stron penalty is veryy essential. Thery are to eager to find obstales than finding answer to obstacles. It is very6 important that Govt, PSU, corporate bodies and other big establsihments must azdhere to SAKAL payemnt to increase the velocity of circulation and cdredit is mandatorily limited to justd 30 days from the recipt of demand bill .All transactions must be made digital either in or out and Cash transactions must be brought to ZERO.This will galavenise many entrepreneurs who could not think of starti8ng an industry because of unilited delaty in payments either by govt or others.
Indian Industry
bill | Tue Feb 17 21:52:17 2015
We have completely severed our ties with Indian businesses.Quality is the issue, even when we are able to get satisfactory merchandise it is offset with enough rubbish that there is no way to make any profit from it. We have been buying motor vehicle parts in India for 25 years and the quality packing and lead times have never been worse. Combined with huge deposits for good never supplied and India becomes a huge money looser for us. We have shifted our fuel tank manufacture to Taiwan along with many other projects. It seems that India business are unable to meet the demands of the modern consumer and I fear they may not have the resources to rectify the issue. For better or worse we have abandoned all India suppliers and regret that what seemed so promising has turned so remarkably sour.
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