Govt working to identify key sectors for making India a manufacturing hub

The commerce and industry ministry is working to identify certain key sectors -- like capital goods, leather and chemicals -- with a view to establish India as a manufacturing hub, according to sources.
Several meetings have taken place with stakeholders, including industry chambers, to identify those sectors which have the potential to become global winners and make India a strong manufacturing hub, sources said.
"There are 12 champion sectors which can be looked upon. These include modular furniture, toys, food processing like ready-to-eat food, agrochemicals, textiles like man-made fibers, air conditioners, capital goods, pharma, and auto components," one of the sources said.
Groups and sub-groups have been constituted on the matter by engaging representatives from industry chambers like CII and Assocham.
The core group would identify specific implementable policies based on issues like technological capability, employment potential, and global as well as domestic demand, they added.
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Commerce and Industry Minister Piyush Goyal has recently stated that in the post-Covid era, there is going to be a perceptible change in the global supply-chains, and Indian industrialists and exporters should be looking to capture significant share in the world trade.
He has said that the ministry is working on identifying the specific sectors which can be taken forward in the immediate future for the purpose of the export.
Promoting manufacturing will help in creating more jobs and pushing India's dwindling exports.

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The manufacturing sector contributes about 15 per cent in the country's economy and the government is aiming to increase it significantly.
The output of eight core infrastructure industries shrank by a record 6.5 per cent in March due to significant dip in production of crude oil, natural gas, fertiliser, steel, cement, and electricity amid the coronavirus lockdown.
Exports too contracted by a record 34.6 per cent in March on account of the lockdown due to Covid-19 outbreak.

Manufacturing, mining pull down industrial output growth to 3.1% in May

Manufacturing and mining pulled down industrial output growth to 3.1 per cent in May, compared to 4.3 per cent in April. Experts partially attributed this to cut in private spending during elections. However, if one assesses growth in the Index of Industrial Production (IIP) in a longer series, the May numbers are not too disappointing. Except April, growth has been subdued since November 2018. IIP growth from November to March ranged from (0.1) per cent to 2.6 per cent.
It was mainly electricity generation and fast moving consumer goods that proved to be the saviours for IIP numbers. While the former grew 7.4 per cent in May against 5.9 per cent in April, the latter expanded by 7.7 per cent against 5.9 per cent.

Elsewhere, there was slower growth in May compared to April. “The decline in industrial growth in May, relative to the previous month, was fairly broad-based,” Aditi Nayar, principal economist at ICRA said. Among the most prominent were capital goods and consumer durables. Capital goods rose just 0.8 per cent in May, compared to 1.2 per cent in April, which does not augur well for growth in the coming months.
Production of consumer durables fell 0.1 per cent, compared to 2.2 per cent, during the period primarily on account of subdued automobile figures. In fact, data released by the government showed that scooters and motorcycles pulled down IIP growth by 0.13 points.
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Expansion in the mining sector was a mere 3.2 per cent in May, compared to 5.1 per cent in the previous month. Growth in the manufacturing sector was also subdued at 2.5 per cent in May, compared to 3.9 per cent in April. Madan Sabnavis, chief economist at CARE Ratings, said: “IIP growth remained subdued due to the election month, in which private spending was fairly constrained. Government spending was also restricted at this point of time.”