The Hindu Business Line : What hampers growth of manufacturing sector

THE Cochin Chamber of Commerce and Industry organised a half-day workshop to deliberate on the draft report of the National Manufacturing Competitiveness Council (NMCC) on the National Strategy for Manufacturing.

Inaugurating the workshop, the State Electricity Minister, Mr Aryadan Mohammed, stressed the need for growth in manufacturing sector as this sector could play a major role in bringing down the unemployment rate. The manufacturing sector is vital for the country's growth and there should be less interference by government and bureaucrats in this sector, he said. At present, manufacturing sector contributes just 0.5 per cent to the country's GDP and this has to at least double, by focusing on research and development, productivity and quality, he added.

Mr N. Sreekumar, President of the Chamber emphasised the need for improvement in cost, quality and delivery for the competitiveness. The improvement in manufacturing sector is imperative, especially in the context of migration from the rural areas looking for new jobs in other areas.

Mr V. Krishnamoorthy, former Chief Secretary, in his address made some comparisons on how the employment has actually come down in the organised sector even while the manufacturing has gone up. He was of the opinion that the Industrial Disputes Act should be replaced with Industrial Harmony Act and in industrial disputes bi-partism should be encouraged.

He was also of the opinion that Section 9A of the Industrial Disputes Act along with section 11 and 11 (a) should be reviewed in the changed circumstances. He wanted the scaling up of technology to reach the level of developed countries. Productivity and cost of production should be kept at five per cent instead of reducing it by five per cent. The country should have its own benchmark.

Mr M.N.V. Nair, Management Consultant, delved into the poor quality of education, inefficient transport system, poor quality of power supply and the delay in government decisions as the deterrents to competitiveness in the country.

The key recommendations of the NMCC report are increasing the competitiveness and creating conditions for the growth of the manufacturing sector, lowering the cost of manufacture, investing in innovations, strengthening education and training, adoption of global best practices, the right market framework, competition and regulations, promotion of small and medium industries, infrastructure development and creating a monitoring mechanism and steps to measure performance.

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