Performance of Manufacturing Sector

The performance of the manufacturing sector, in terms of its annual growth, has been fluctuating during the last 10 years. After experiencing double digit growth during 2005-06 to 2007-08 and in 2009-10, the growth of the manufacturing sector slowed down considerably during 2012-13 and 2013-14. The reasons for the decline in growth of manufacturing sector in recent years inter-alia are moderation in domestic demand, inflationary pressures, increase in input costs and slowdown in economies of other parts of the world etc.

Employment and unemployment estimates are disseminated in the specific rounds of Survey by the National Sample Survey Office (NSSO). Planning Commission, inter alia using the available NSSO Survey results at that time etc. estimated in the Twelfth Plan document that employment in manufacturing which had increased from 44.05 million in 1999-2000 to 55.77 million in 2004-05, had thereafter declined by 5 million to 50.74 million in 2009-10.

NSSO provides only sector wise ‘Work participation rates’ (WPR), not sector wise number of people employed. As per 61st and 68th rounds on ‘Employment and Unemployment’ by NSSO, the per thousand distributions of usually employed persons in the manufacturing sector is as given in the table below:

Per Thousand distribution of usually employed persons in manufacturing sector.

In response to persisting high level of Current Account Deficit (CAD) at 4.7% of Gross Domestic Product (GDP) in 2012-13, the Government has taken a number of measures to control CAD and improve the Balance of Payments situation. These include measures for boosting exports, curtailing non-essential imports, measures for reducing gold imports, improving capital inflows and reducing volatility in the foreign exchange market. As noted in Reserve Bank of India’s Fiscal Stability Report June 2014, with modest recovery in key partner economies and policy measures that had been taken, the trade balance improved during 2013-14. Thus, the current account which had been under stress since 2011-12 was brought to a sustainable level during 2013-14 and CAD fell from 4.7 per cent during 2012-13 to 1.7 per cent during 2013-14.

The information was given by the Minister of State (Independent Charge) of the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in Rajya Sabha today.