“China is 30 years ahead of India” [June 2012]

June 19, 2012 12:34 pm

Although 30 years ago we started on the same platform, China today is 30 years ahead of us and perhaps in an irreversible mode. The share of the manufacturing sector in GDP is only 15 per cent in India compared to 34 per cent in China and 40 per cent in Thailand- TV Raghava Badhya, Director and Vice President – Marketing, Makino India
Uncertainty looms over the machine tool industryThe manufacturing sector plays a key role in economic development, mandating increased government attention, as demonstrated by the November release of the National Manufacturing Policy. The Indian manufacturing sector is facing growth slowdown, slipping to 3.9 per cent in GDP during 2011-12 from 7.6 per cent during 2010-11. The machine tool industry, though led by manufacturing benchmarks, is mainly dependent on the growth cycle of the automotive sector. TV Raghava Badhya, Director and Vice President – Marketing, Makino India comments, “The year 2007 saw an upswing; 2008 – 09 faced a slowdown followed by an upswing again in 2010 – 2011. We wish to sustain last year’s momentum, overshadowing the current uncertainty”.
He further added, “As the economy grows so will the machine tool industry as every industrial, engineering and lifestyle product has its source in machine tools. So we hope that Indian machine tool industry will achieve the right pace and place in global market share”. Today, India has a small share of the global machine tool industry unlike China which is 7 to 8 times, and perhaps, the largest consumer of machine tool industry in the world.
China is 30 years ahead of usThe Indian manufacturing sector has achieved quality, economics of scale and deliverance for mass production. India ranks second in terms of manufacturing competence, according to report ‘2010 Global Manufacturing Competitiveness Index’, by Deloitte Touche Tohmatsu and the US Council on Competitiveness. However, India is still in the bottom 1/3rd of the value chain in manufacturing sector whereas China has moved to higher echelons of in all spheres of manufacturing.
Today India is lagging behind in investment in technology, infrastructure, shortage of working capital, finance, competition faced from imports and lack of skilled and trained manpower. “Although 30 years ago we started on the same platform, China today is 30 years ahead of us and perhaps in an irreversible mode. The share of the manufacturing sector in GDP is only 15 per cent in India compared to 34 per cent in China and 40 per cent in Thailand”, said Mr. Raghava Badhya.
Improve the Competitiveness Like any other sector, manufacturing sector also grows despite governmental support or non support. Mr. Raghava Badhya noticed, “It is a miracle that the industry has survived and has to live with too many government shackles, too less incentives, bureaucratic hurdles in terms of taxation, regulations etc. In order to overcome these shortcomings the government has to take a holistic appraisal to improve the competitiveness of this sector as many sectors like auto components, pharmaceuticals and IT enabled engineering services are doing well internationally even now”.
Revival of the sector to enhance growthTalking about the potentials of creating 100 million jobs in next 10 years, Mr. Raghava Badhya asserts, “It is not an impossible target to create 100 million jobs. It is estimated that India needs to create 7-8 million new jobs each year outside agriculture to stay at its current unemployment level of 7 per cent”.
In addition, manufacturing jobs are ideal for workers transitioning out of agriculture as it is easy to adapt. “The revival of manufacturing sector can create close to 2.5 million new jobs every year”, he adds.
Road ahead for GovernmentHowever, Mr. Raghava Badhya feels, “To achieve such ambitious target, the government needs to provide adequate physical infrastructure, faster bureaucratic clearances, lesser governmental controls and affordable cost of borrowing. I am sure all these can easily spur the GDP growth by an additional 2 – 3 per cent or may be even 4 per cent”.
He also suggests, “We have to develop at least 100 cities as industrial towns which are 80 to 100 kms from the existing metros and leave tier 1 cities by providing good connectivity. We also need to identify and develop more region based industrial clusters like Tirupur, Coimbatore and Kolhapur. So we can capitalise on growth with exclusive centres like an automotive hub, aerospace hub, foundry hub, textile hub and others. Also in equal measures, we need to take steps to maintain the socio economic impact, nature and the social fabric of the society”.“We also have to create a conducive environment for cutting edge technology companies to set up base and infrastructure here. As there are ample opportunities in Asia for such companies, I feel India is not seriously looked into by such companies due to poor turnaround time amid too much of external uncertainties. We tend to be more inward, than outward where quantum leap takes place”, Mr. Raghava Badhya adds.
Makino’s product capabilitiesMakino would continue to bring products and technologies to enable the manufacturer to move up the value chain by producing products faster, better and cheaper. The company has quite a slew of products in the pipeline. Last year, it brought out a couple of next generation Horizontal Machining Centres called the ‘nx series’ (enhanced machines with extended capabilities) and Vertical Machining Centres (PS 65 & F3). This year, Makino has launched a very large sized VMC for the die mould industry. Sharing the expansion plan for the company, Mr. Raghava Badhya said, “We are expanding our area of operations. We are solidly building our resources and almost doubling our capacities in certain segments. With all these, we hope it will move us not only to the next leap in the value chain but also prepare us for the growth value in the coming growth circles”.