Gujarat leads the investment race in manufacturing: Assocham

As per the Associated Chambers of Commerce and Industry (Assocham) recently released analysis of ‘Investments in Manufacturing Sector’, a study conducted by the industry body, Gujarat has emerged as a prominent manufacturing investment centre across the country and accounted for 26-33 per cent manufacturing share in key product segments of non-metallic mineral products, textiles and food and beverages from 2004-05 to 2011-12.
 
“Gujarat also attracted 25% in investments in transport equipment and over 18% in investments in chemicals industry during the same period,” it said. In addition to metal and metal products segment, Gujarat is among the top five manufacturing investment centres in the entire product segment, the analysis stated.
 
The analysis pointed out that the lack of new investments is a real threat to the survival of manufacturing in India. “Manufacturing accounts for about 4/5th of the industrial activity. But since the services sector has outranked industry in terms of its contribution to India’s Gross Domestic Product (GDP) in the 80s, the share of manufacturing has gradually been shrinking due to adverse terms of trade,” it added.
 
D S Rawat, National Secretary General, Assocham, said, “With investments worth over Rs 30 lakh crore, the manufacturing sector accounted for a share of about 25% in the total outstanding investments worth over Rs 122 lakh crore attracted by various sectors across India as of March 2013.”
 
Explaining the investment scenario in manufacturing sector, Assocham said that metals and metal products followed by chemicals industries has been dominating the domestic manufacturing sector in investments.
 
The share of metals and metal products in total outstanding investments in manufacturing increased from about 47% to 50.5% between March 2005 and March 2012, the analysis pointed out.
 
Share of chemicals in total outstanding investments in manufacturing sector dipped from over 35% to about 26% during the corresponding period, the analysis highlighted.
 
In other segments, non-metallic mineral products accounted for about nine per cent share in investments followed by transport equipment and machinery (five per cent each), food and beverages (two per cent) and textiles (over one per cent).
 
“Considering that investments in food and beverage, textile sectors have been less attractive, there is a grave need to revive investments in these areas as they are highly labour-intensive areas which is the key to realise employment objectives of National Manufacturing Policy (NMP),” said Rawat.