New Delhi, 12 December, 2014: Business leaders in the manufacturing sector are optimistic about performance of their businesses and the sector as a whole over the next 12 months. The companies, which participated in this survey, do not expect any decline in their own business revenues or their industry’s revenue in this period.
They believe that the stated intent of the government to remove obstacles to business performance followed up with appropriate action on the ground as also easing of the global economic scenario will provide the much needed boost to GDP and the manufacturing sector going ahead.
As per the India Manufacturing Barometer 2014- survey by FICCI and PwC released here today, 55% of the respondents expect to make major investments over the next 12 months. Forty nine per cent of the surveyed companies plan to add capacity. Research Development, new products or services introduction and facilities are the three priority areas of investment for over 45% of these respondents.
These reflect an increase in the level of optimism and activity as compared to the findings in the Manufacturing Barometer survey conducted in 2013. Last year, while six per cent had expected their own business revenues to decline, 20% respondents had expected their industry’s revenue to decline, over the next 12 months. Several corporate leaders said that the sector saw signs of improvement in FY14. More than half the respondents (56%) said they managed to keep prices of goods up in FY14. Finished inventories remained steady for nearly half the respondents.
Indian manufacturers also expect the government to simplify export import (EXIM) policies and related documentation, rationalise the tax structure and implement Goods and Services Tax (GST). Modification of land acquisition rules, speedier clearances and licensing, and amendments to labour laws are factors they believe will facilitate investments.
Bimal Tanna, Leader Industrial Manufacturing at PwC India said, “With rising costs in other global manufacturing hubs such as China there is perhaps an unparalleled opportunity for India to step into the breach and capture a significant share of the global manufacturing pie. Yet, the road ahead is not without challenges with several infrastructural and regulatory bottlenecks. Business leaders are looking to the government to rationalise taxes and regulatory policies and processes to facilitate investments and infrastructure development”.
Mr M M Singh,Chairman, FICCI Manufacturing Committee said: “The world economy is recovering from a protracted slowdown. India is revamping its brand image by ‘Make in India’ campaign to establish a footprint in World class manufacturing. FICCI and PwC believe that 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. In the long run, a modern set of laws in the areas of taxation, labour, FDI, land acquisition and environment needs to be implemented”.
Mr Shyam Bang, Co-Chairman, FICCI Manufacturing Committee and Executive Director, Jubilant Life Sciences said “In the coming months we can expect some bold measures from the Government to encourage investments and boost investor confidence. We are also looking forward to the forthcoming budget for driving growth in manufacturing. Structural bottlenecks have significantly slowed down the growth and investments in India. Investment growth has weakened in the last few years emphasising the need for significant improvement in the regulatory business environment in India besides other structural reforms”.
Notes to the Editor
About the survey: The Indian Manufacturing Barometer 2014 delves into the current sentiment of business leaders from the manufacturing sector and explores the factors which, according to them, would impact their businesses over the next few months and the strategies they would like to employ to address barriers to growth.
Source: India Manufacturing Barometer Survey, December 2014
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