Skip to main content

Slack in private sector investment: 74% India's manufacturers say they have no plans for capacity addition

By Our Representative
The Federation of Indian Chambers of Commerce and Industry (FICCI), in its latest quarterly survey on expectations of manufacturers for the period April-June 2017, has said that “future investment outlook remains less optimistic”, with “74% respondents reporting that they don’t have any plans for capacity additions for the next six months.” Observers consider this as lingering impact of demonetization, effected by Prime Minister Narendra Modi in November 2016.
Pointing out that this just about a one per percent improvement over the earlier quarter, January-March 2017, FICCI, in its “Manufacturing Survey Report – July 2017” says “Although, the bleak investment outlook seems to be waning”, if one takes into account that in October-December 2017, which was the demonetization phase, “77% respondents had no plans for capacity addition”, things are clearly not on the upswing.
“High percentage implies slack in the private sector investments in manufacturing is there to continue for some more months”, says India’s premier industry body, adding, “Large volumes of imports, under-utilised capacities and lower domestic demand from industrial sectors are some of the major constraints which are affecting the expansion plans.”
“On a broader perspective”, the report says, “In some sectors (like chemicals, capital goods, textiles machinery, cement, metals and paper) average capacity utilization has either remained same or declined.” The only sectors which are experiencing a rise in the average capacity utilisation are “auto, textiles and electronics and electrical”, it adds.
The survey further says that the cost of production as a percentage of sales for product for manufacturers in the survey has risen significantly as 69% respondents during the period April-June 2017, against 60% respondents reported cost escalation in the previous quarter. “This is primarily due to rise in minimum wages and raw material cost”, it claims.
69% manufacturers reported a higher cost of production, as against 60% earlier, primarily due to rise in minimum wages and raw material cost
“About two-thirds of the respondents expect slightly higher production levels in the April-June 2017 (when asked for an annual comparison). This also gets reflected in the order books as similar proportion of industry participants reported higher orders for the same quarter (on a sequential basis)”, the survey says.
According to the survey, while about 67% of the respondents reportedly plan to add capacity in the next six months to the tune of about 15%, it underlines, “The expansion plans may get affected by a few delays largely due to the lag period involved in getting plant and machinery, which usually extends to about 20 weeks.”
The survey says, “Almost all of the respondents expect exports to get impacted (fall of 0-5%) due to the recent currency appreciation, while imports to get cheaper by 5-10%.”
“Close to 50% of the industry representatives expect the growth of manufacturing sector to remain same, while a few expect the growth to revive in near future”, the survey says, adding, “For a little over 50% of the respondents, cost of production as a percentage of their sales increased vis-à-vis last year”, mainly due to “inflationary pressures on raw material costs and increase in labour wages.”

Comments

ALSO READ

India failing to dictate diplomatic preferences of Nepal, Bhutan, is unfairly blaming Beijing: Chinese daily

By Our Representative
In a sharply-worded editorial, a top Chinese media outfit, described by BBC as state-run, has said, commenting on India's foreign relations with its neighbours, that "speculation and suspicion" is "certainly not diplomacy". Published in "China Daily", the largest circulating English Monday-to-Saturday newspaper with branches across the world, the editorial notes (September 20) that "several recent events" in Nepal and Bhutan, are "gnawing worrywarts in New Delhi".
The editorial -- which comes close on the heels of a sharp critique of India's foreign policy in a state-supported Russian media outfit, Sputnik International, calling India's anti-Pak diplomacy as having "gone awry" following Prime Minister Narendra Modi's "half-baked" push for anti-terror drill down "others' throat" -- says, the " worrywarts" include "Nepalese troops taking part in a joint…

Ahmedabad, GIFT, Adani city get 1.68 lakh acre ft Narmada water; Gujarat's rural areas just 4.27 AF: Letter to CM

Counterview Desk
Well-known farmer rights leader Sagar Rabari, in an open letter to Gujarat chief minister Vijay Rupani, has demanded a transparent account of Narmada water, saying, while he has received a "routine reply" from him to his earlier, the data emerging from his RTI application show huge quantity of water being directed to Ahmedabad, the 10 km stretch of Sabarmati for the Ahmedabad riverfront, and nearby elite urban areas, including the Adanis' Shantigram township and GIFT City.

Gujarat BJP MLAs, youth leader "incited" attack on North Indians: Cong releases video

Counterview Desk
Senior Gujarat Congress leader Shaktisinh Gohil, currently in charge of Bihar and national spokesperson, All-India Congress Committee, has sent a legal notice to chief minister Vijay Rupani threatening criminal case and civil defamation suit for accusing him with "baseless statement" that he was responsible for attacks on north Indians in Gujarat.

17 lakh Jharkhand elderly, widows, differently abled do not receive pension: Public hearing told, aadhaar is a hurdle

By Our Representative
Hundreds of elderly, widows, single women and differently-abled persons from different districts of Jharkhand gathered near the Raj Bhavan in Ranchi for a public hearing organized by the Jharkhand Right to Food Campaign and Pension Parishad demanding the right to universal social security pensions ahead of World Elderly Day on October 1.

Ethnocide in Caribbean island filmed following award winning docufilm on Jamaica's anti-colonial Indian roots

International awards winner for Best Feature Documentary Linda Aïnouche for “Dreadlocks Story” (2014), which shows how Indians are entangled in the Jamaican society, and how Hinduism was a source of inspiration for the Rastafari movement, is all set to release her new documentary, “Marooned in the Caribbean”, which aims at documenting the awful desolating living conditions that Raizal people, the native inhabitants of San Andres Archipelago, endure.
Sons of slaves, these islanders have fallen prey to what the Colombian government calls Colombianization. “It’s a process”, according to her, “which kills the Raizal culture; it’s the killing of the Raizal soul. Colombianization subjugates Afro-descendants of San Andres to an ethnocide.”

Explorer, director and producer, Linda Aïnouche writes exclusively for Counterview: ***
Nobody escapes from blood and thunder in Colombia, and definitely not in the archipelago of San Andres, situated closer to Managua and Kingston than Bogota. The Raizal p…

Accused of being RSS plant, Modi man, Hyderabad Urdu varsity chancellor asks President to probe "irregularities"

Counterview Desk
Refused entry in the Maulana Azad National Urdu University (MANUU), the central university's newly appointed chancellor Firoz Bakht Ahmed, who claims to be grand nephew of Maulana Abul Kalam Azad, has, in a letter to the President of India, said that MANUU vice-chancellor (V-C) Dr Aslam Parvaiz has accused him of being an RSS plant and a Modi man, whose sole aim is to "interfere in the working of the university".

India to deport Rohingya refugees, as the world moves towards prosecuting Myanmar for genocide

By Tapan Bose*
Seven Rohingya Muslims refugees who were held at a detention centre in Assam since 2012 will be handed over to Myanmar. The Supreme Court of India has refused to stop their deportation. The new Chief Justice of India Ranjan Gagoi said, "We are not inclined to interfere on the decision taken".

An elite Kutir set up by Modi far from the "madding" crowd: This Gandhi museum is formal, unapproachable

By Rajiv Shah
Have you ever heard of a Gandhi museum, sough to be projected as the “largest” on the Mahatma, yet totally inaccessible, in sharp contrast to Ahmedabad’s humble, approachable and unassuming Gandhi Ashram on the banks of Sabarmati, set up by the Mahatma during the heydays of the freedom movement? It exists about 30 kilometres away, its idea was conceived by none other than a person who has today become even more inaccessible than he ever was: Narendra Modi, India's Prime Minister.

History less known: Kasturba's role as an independent woman and a freedom fighter in her own right

By Nandini Oza*
Even the most deserving of women do not find a place that equals their worth in history. Kasturba is one such woman whose contribution to India’s struggle for freedom has been exemplary, and yet, it has not received the recognition it deserves. Kastur Makhanji Kapadia was born in the year 1869, the same year and in the same town of Porbandar in Gujarat as Gandhiji. In fact she was older than Gandhiji by a few months.

Post-MJ Akbar resignation: #MeToo movement and fears of backlash

By Sheshu Babu*
For the last few days, #MeToo movement has picked up momentum and many women are coming out with horrific tales of severe harassment in their past lives. They are not afraid anymore to expose famous persons including those at ministerial levels. As a senior journalist Neeraja Chowdhury opined (“An exit, a beginning”, October 18, 2018, indianexpress.com), "The #MeToo revelations are like the eruption of a volcano which was imminent, given the journey working women have covered. It was not easy to make public what they had gone through,and take on powerful men.”