Launching of mega projects could help

June 26, 2014 4:53 am

One way of helping the industry to grow is to launch mega projects which would help in reviving the industry from big large scale companies down to the SMEs
 The Apex Group has over 50 years industry expertise helping companies across the globe to maximise the return on their surplus assets. It offers services like asset disposal, investment, valuations, and logistics. Manoj Kumar shares what he feels about India’s goal to become global manufacturing giant.
Local market should become more competitiveTo become a global manufacturing hub can’t be said to be just a dream for India. It is quite possible as India is having more than 500 industrial estates comprising of largely small and medium scale industries who act as vendors for companies like HAL, BHEL, Suzuki and others. However, in spite of a large manufacturing base, these industries are not incentivised and hence the industry faces difficulty in growing due to challenges of labour issues, infrastructure and procedural delays. Actually the local manufacturing should be stimulated. As a result, being more competitive in terms of both cost and quality it will open the doors to exporting to other developed and developing markets.
India also has a large young working population. Similar to the model adopted by IT companies, where  India has offshore as well as onsite support, the Indian machine tool industry can gain from its technical expertise to furbish and maintain machines from the US and Europe. They can also get the machines to any of the SEZs in India for offshore work. The manufacturing in developed markets is gradually decreasing and is swamped with cost-effective competitors like China, South Korea and Taiwan. The Indian machine tool industry should look at untapped markets such as Africa, South East Asia and the Middle East for exporting machines.
Another important aspect is our education system. In the US and Europe, people get practical experience after completing their higher secondary school. Likewise, Indian education system should encourage young students to get into manufacturing. For this to happen, there should be more vocational training programmes/master programmes and practical learning should be encouraged.
Boosting factorsFor any industry to grow, it is necessary to provide an efficient eco-system. This can be achieved through policy changes, improvements in infrastructure, power, people and education issues coupled with the tax structure that promotes and incentivises manufacturing.
Factors causing delayOne of the major factors causing delay is lack of financial provisions for SMEs. Most of the SMEs lack access to banks or financial institutions. Even though other forms and institutions of funding are available, SMEs miss out because of lack of knowledge or information.
Moreover, due to of absence of manufacture-friendly eco-system in India, it is difficult for Indian companies to compete with China for cheap raw material. Companies these days face budgetary constraints with regard to project expansion or start-up ventures, thereby putting a strain on cash flows of the company.
Industry expects from new govt For a new government, an important challenge is to bring back growth into the manufacturing industry which has remained dormant for a long period. One way of helping the industry to grow is to launch mega projects which  would help in reviving the industry from big large scale companies down to the SMEs.
Manoj Kumar, Director, Apex Group