Bimal Tanna, Leader, Industrial Products, PwC India
The second edition of the FICCI-PwC India Manufacturing Barometer was released by Ajay Shankar, former Member Secretary, National Manufacturing Competitiveness Council, at the FICCI office in New Delhi.
The India Manufacturing Barometer 2014: Turning the Corner delves into the current sentiments of business leaders from the manufacturing sector and explores the factors they perceive will impact their businesses over the next few months and the strategies they expect to employ in order to address barriers to growth in order to make the most of the sector turning the corner.
The Indian manufacturing sector faces a defining moment in its evolutionary path. As the global economy revives, growth rates across several major economies are expected to improve. The new Indian government has also stated its intention to attract manufacturing sector investment through its Make in India campaign.
Overall, there is an increase in the level of optimism and activity as compared to the sentiments captured in the previous edition of the report.
Business leaders in the manufacturing sector are optimistic about performance of their businesses and the sector as a whole over the next 12 months. More than half the companies in the sector expect to plan major investments with research and development, new products or services introduction and facilities expansion being the three priority areas.
Concerns related to raw material and energy costs persist, though domestic demand is less of a worry than last year. Business leaders are looking to the government to rationalise taxes and duties and to invest in infrastructure improvement.
In our view, a series of short- and long-term measures will help take the manufacturing sector to the next level of growth. In the short run, the government needs to streamline regulatory processes and take meaningful confidence-building measures for investors. It has already begun this process through a number of measures aimed at labour reforms. In the long run, a modern set of laws in the areas of taxation, labour, FDI, land acquisition and environment needs to be implemented.