MANUFACTURING INDUSTRIES [Contribution of Industry to National Economy]

Contribution of Industry to National Economy 

Over the last two decades, the share of manufacturing sector has stagnated at 17 per cent of GDP – out of a total of 27 per cent for the industry which includes 10 per cent for mining, quarrying, electricity and gas. This is much lower in comparison to some East Asian economies, where it is 25 to 35 per cent. The trend of growth rate in manufacturing over the last decade has been around 7 per cent per annum.  The desired growth rate over the next decade is 12 per cent.  Since 2003, manufacturing is once again growing at the rate of 9 to 10 per cent per annum.  With appropriate policy interventions by the government and renewed efforts by the industry to improve productivity, economists predict that manufacturing can achieve its target over the next decade.  The National Manufacturing Competitiveness Council (NMCC) has been set up with this objective.

CONTRIBUTION OF INDUSTRY TO NATIONAL ECONOMY

Long Answers:-

1. What is the contribution of industry to national economy of India? Compare it with the East-Asian countries. What is the desired growth and present position of industry in GDP?

Ans. 

(a) The contribution of manufacturing sector to national economy ha satisfactory for the last two decades. It has stagnated at 17 per cent of GDP out of a total of 27 per cent for the industry which includes 10 per cent of mining, quarrying, electricity and gas.

(b) In comparison to India’s 17 per cent share in the GDP, the East-Asian countries have contributed to 25 to 35 per cent of GDR.

(c) (i) The desired growth rate over the next decade is 12 per cent.

(ii) At present, growth rate is about 9 to 10 per cent and it is expected that we can achieve the growth rate of 12 per cent by some efforts like setting up of the National Manufacturing Competitiveness Council (NMCC).