The reality of 'Make In India' is that it is yet to emerge as a strong trend. At least that is what industry lobby body FICCI's latest manufacturing survey says - export outlook for manufacturing is feeble, a majority don't have plans for capacity additions, inventory levels of finished goods are high, and hiring in the sector will remain muted.
FICCI's survey, a quarterly affair, tested the expectations of manufacturers for the December quarter of 2015/2016 in 12 sectors: textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto, leather and footwear, machine tools, food, tyre, and textiles machinery.
Responses were drawn from 336 manufacturing units. Only capital goods and auto showed "strong" growth expectations (above 10 per cent growth); metals and metal products, cement and ceramincs, food products and even electronics have 'low' expectations (5 per cent). The rest had moderate expectations of growth.
The percentage of respondents expecting higher production in the December quarter versus the corresponding quarter last year dipped to 55 per cent from 63 per cent noticed in the September quarter.
Nevertheless, it is difficult to arrive at a pattern from past results. Expectations of Indian manufacturers is see-sawing every quarter.
The December quarter outlook appears more positive on a year-on-year comparison - in the December quarter of 2014/2015, only 50 per cent expected higher production. That climbed to 52 per cent in the March quarter of 2014/2015 before sliding back to 44 per cent in the June quarter.
Capacity addition, FICCI surveyed pointed out, was being pegged back by "poor demand conditions, high cost of borrowing, delayed clearances and cost escalation".
The low expectations from electronics may be counter-intuitive given the flurry of investments announced in the mobile phone assembly sector. But the survey indicate that the imports of telecom equipment and components are still very high.
The result of all this is that employment in the manufacturing sector hasn't picked up; it is doubtful if it would see an uptick any time soon. Around 76 per cent of the respondents said they are unlikely to hire additional workforce in the next three months. Not good news.
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