SHARE OF INDUSTRY IN GVA

The sector’s relevance can be identified through

various direct and indirect linkages with other
sectors, contributing to economic growth and
employment. First, it ensures that domestic
production can accommodate domestic demand
and reduces the reliance on imports. Thereby
assisting in the improvement of trade and current
account balances. Second, industrial growth has
multiplier effects, which translates into
employment growth. Some industries, such as
textiles and construction, have high employment
elasticities. Third, industrial growth spurs growth
in services sectors such as banking, insurance,
logistics, etc.
• The Index of Industrial Production (IIP) is a composite indicator that measures the short-term changes in
the volume of production of a basket of industrial products during a given period with respect to that in a
chosen base period. ( Base Year1992-93 change 2011-12)
• The Central Statistical Organisation (CSO) under the “Ministry of Statistics and Programme
Implementation” is responsible for the compilation and publication of the Index of Industrial Production
(IIP) since 1950
• Pulse of the Economy
 CORE SECTOR

This is an index of the eight

most fundamental industrial sectors of the
Indian economy and comprises 40.27
percent of the weight in IIP
 USED BASED CLASSIFICATION : Use-based category is
based on the principle that industries are classified according
to the final use of the output.
Basic Goods: Capital Goods: Intermediate Durable Consumer Durable Non
Goods are Goods Goods ( more than Consumer Goods
products that are 3 to 4 years)
part of physical
assets critical for
production activity
Iron and Steel Hand Tools and Bolts, Nuts, Screws AC Clothes
Coal Small Tools Batteries Fridge
Fertilizers Machine Tools
Cement Tractors
Aluminum Electric Motors
Diesel Engines
INPUT BASED CLASSIFICATION: SOURCE OF
RAW MATERIALS
 Capacity utilization (CU)

• is an important economic indicatorto assess demand and

investment prospects of the economy. CU rates
are largely able to track the pace of manufacturing
activities in the economy. The growth rate of
the iip-manufacturing index and capacity utilization
(provides a snapshotof the demand conditions for India's
manufacturing sector
•
 GROSS FIXED CAPITAL FORMATION
• Gross fixed capital
(GFCF)
formation (GFCF) is the gross addition to fixed
assets like machinery and equipment, intangible assets
and indicatesthe state of investments in the
economy. During 2019-20, the share of industrial sector
in total GFCF in the economy (at current prices)
was recordedat 30.1 per cent.
Sub divisions of Industry Contribution to GFCF
•
Manufacturing 51%
Electricity 23%
Construction 21%
Mining 5%
Total
 FDI IN INDUSTRIES

• DEFENCE SECTOR : FDI IN DEFENCE SECTOR IS ALLOWED UP TO

74 PER CENT THROUGH AUTOMATIC ROUTE (FROM EARLIER
49PERCENT
• INSURANCE SECTOR: GOVERNMENT ISSUED PRESS NOTE 2(2021) DATED 14.06.2021
TO RAISE THE PERMISSIBLE FDI LIMIT FROM 49PERCENT TO
74PERCENT IN INSURANCE COMPANIES UNDER THE AUTOMATIC
ROUTE
• PETROLEUM & NATURAL GAS SECTOR: FDI UPTO 100% UNDER AUTOMATIC ROUTE
• TELECOM SECTOR: INVESTMENT 100% UNDER AUTOMATIC ROUTE
 THE MANUFACTURING LANDSCAPE SHOWS UNEVEN GROWTH ACROSS VARIOUS
CATEGORIES

Motor Vehicles Production of manufacturing

electronic and
Manufacturing and chemical coke and hub of manufacturing
Chemicals optical
: Robust products refined semiconductor of ‘computer,
products
Demand petroleum s

Textiles, apparel
and leather, have been showing tepid growth, as export demand for these products has been
mellowing with the slowing of global output and demand. Growth in pharmaceutical output has
slowed due to an unfavourable base effect and the waning of the pandemic
 AMONG THE CHOSEN 190 COUNTRIES, INDIA
RANKED 63RD IN EODB
• THE EASE OF DOING BUSINESS (EODB) INDEX IS A RANKING SYSTEM
ESTABLISHED BY THE WORLD BANK GROUP.
• THE RESEARCH PRESENTS DATA FOR 190 ECONOMIES AND AGGREGATES
INFORMATION FROM 10 AREAS OF BUSINESS REGULATION:
 PARAMETERS

• 1. STARTING A BUSINESS,
• 2. DEALING WITH CONSTRUCTION PERMITS,
• 3. GETTING ELECTRICITY,
• 4. REGISTERING PROPERTY,
• 5. GETTING CREDIT,
• 6. PROTECTING MINORITY INVESTORS,
• 7. PAYING TAXES,
• 8. TRADING ACROSS BORDERS,
• 9. ENFORCING CONTRACTS,
• 10. RESOLVING INSOLVENCY, AND
• 11. EMPLOYING WORKERS, AND
• 12. CONTRACTING WITH GOVERNMENTS.
 MAKE IN INDIA

• MAKE IN INDIA WAS LAUNCHED IN SEPTEMBER 2014 BY THE GOI TO ENCOURAGE

MULTINATIONAL AS WELL AS DOMESTIC COMPANIES TO MANUFACTURE THEIR PRODUCTS
IN INDIA.
• THE 4 PILLARS OF THE MAKE IN INDIA INITIATIVE ARE NEW THINKING, NEW SECTORS, NEW
INFRASTRUCTURE, AND NEW PROCESSES. THE GOVERNMENT OF INDIA LAUNCHED THE
MAKE IN INDIA INITIATIVE TO ENCOURAGE BUSINESSES TO CREATE, PRODUCE, AND
ASSEMBLE GOODS IN INDIA AND TO ENCOURAGE TARGETED INVESTMENTS IN
MANUFACTURING.
• THE INITIATIVE IS SET TO BOOST ENTREPRENEURSHIP, NOT ONLY IN MANUFACTURING BUT
IN RELEVANT INFRASTRUCTURE AND SERVICE SECTORS AS WELL.
TAGLINE: ZERO DEFECT ZERO EFFECT
• VISION: ATTRACTING BOTH CAPITAL AND TECHNOLOGICAL INVESTMENT IN
INDIA ENABLING IT TO BECOME THE TOP GLOBAL FDI, SURPASSING EVEN CHINA
AND THE UNITED STATES.
• OBJECTIVE: TO FOCUS ON JOB CREATION AND SKILL ENHANCEMENT IN 25 KEY
SECTORS OF THE ECONOMY, INCLUDING AUTOMOBILES, AVIATION,
BIOTECHNOLOGY, DEFENCE MANUFACTURING, ELECTRICAL MACHINERY, FOOD
PROCESSING, OIL & GAS, AND PHARMACEUTICALS, AMONG OTHERS.
• LOGO: IS INSPIRED FROM ASHOKA CHAKRA – IS A STRIDING LION MADE OF
COGS, SYMBOLISING MANUFACTURING, STRENGTH AND NATIONAL PRIDE.
 MAKE IN INDIA VS. MAKE FOR INDIA

• MAKE IN INDIA' PUSHES THE STANDPOINT OF AN EXPORT-ORIENTED GROWTH.

LEVERAGING INDIA'S INEXPENSIVE LABOUR AND OTHER RESOURCES TO KEEP
COSTS LOW, WILL BOOST EXPORTS TO IMPROVE THE DOMESTIC PRODUCTION
BASE. AT THE SAME TIME, "MAKE FOR INDIA' INVOLVES PRODUCTION FOR
CONSUMPTION IN INDIA ITSELF.