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

By Jag Jivan*
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.

“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.”

---

*Freelance writer

Comments

From plagiarism to proxy exams: Galgotias and systemic failure in education

By Sandeep Pandey* Shock is being expressed at Galgotias University being found presenting a Chinese-made robotic dog and a South Korean-made soccer-playing drone as its own creations at the recently held India AI Impact Summit 2026, a global event in New Delhi. Earlier, a UGC-listed journal had published a paper from the university titled “Corona Virus Killed by Sound Vibrations Produced by Thali or Ghanti: A Potential Hypothesis,” which became the subject of widespread ridicule. Following the robotic dog controversy coming to light, the university has withdrawn the paper. These incidents are symptoms of deeper problems afflicting the Indian education system in general. Galgotias merely bit off more than it could chew.

Covishield controversy: How India ignored a warning voice during the pandemic

Dr Amitav Banerjee, MD * It is a matter of pride for us that a person of Indian origin, presently Director of National Institute of Health, USA, is poised to take over one of the most powerful roles in public health. Professor Jay Bhattacharya, an Indian origin physician and a health economist, from Stanford University, USA, will be assuming the appointment of acting head of the Centre for Disease Control and Prevention (CDC), USA. Bhattacharya would be leading two apex institutions in the field of public health which not only shape American health policies but act as bellwether globally.

The 'glass cliff' at Galgotias: How a university’s AI crisis became a gendered blame game

By Mohd. Ziyaullah Khan* “She was not aware of the technical origins of the product and in her enthusiasm of being on camera, gave factually incorrect information.” These were the words used in the official press release by Galgotias University following the controversy at the AI Impact Summit in Delhi. The statement came across as defensive, petty, and deeply insensitive.

Farewell to Saleem Samad: A life devoted to fearless journalism

By Nava Thakuria* Heartbreaking news arrived from Dhaka as the vibrant city lost one of its most active and committed citizens with the passing of journalist, author and progressive Bangladeshi national Saleem Samad. A gentleman who always had issues to discuss with anyone, anywhere and at any time, he passed away on 22 February 2026 while undergoing cancer treatment at Dhaka Medical College Hospital. He was 74.

Growth without justice: The politics of wealth and the economics of hunger

By Vikas Meshram* In modern history, few periods have displayed such a grotesque and contradictory picture of wealth as the present. On one side, a handful of individuals accumulate in a single year more wealth than the annual income of entire nations. On the other, nearly every fourth person in the world goes to bed hungry or half-fed.

From ancient wisdom to modern nationhood: The Indian story

By Syed Osman Sher South of the Himalayas lies a triangular stretch of land, spreading about 2,000 miles in each direction—a world of rare magic. It has fired the imagination of wanderers, settlers, raiders, traders, conquerors, and colonizers. They entered this country bringing with them new ethnicities, cultures, customs, religions, and languages.

Thali, COVID and academic credibility: All about the 2020 'pseudoscientific' Galgotias paper

By Jag Jivan* The first page image of the paper "Corona Virus Killed by Sound Vibrations Produced by Thali or Ghanti: A Potential Hypothesis" published in the Journal of Molecular Pharmaceuticals and Regulatory Affairs , Vol. 2, Issue 2 (2020), has gone viral on social media in the wake of the controversy surrounding a Chinese robot presented by the Galgotias University as its original product at the just-concluded AI summit in Delhi . The resurfacing of the 2020 publication, authored by Dharmendra Kumar , Galgotias University, has reignited debate over academic standards and scientific credibility.

'Serious violation of international law': US pressure on Mexico to stop oil shipments to Cuba

By Vijay Prashad In January 2026, US President Donald Trump declared Cuba to be an “unusual and extraordinary threat” to US security—a designation that allows the United States government to use sweeping economic restrictions traditionally reserved for national security adversaries. The US blockade against Cuba began in the 1960s, right after the Cuban Revolution of 1959 but has tightened over the years. Without any mandate from the United Nations Security Council—which permits sanctions under strict conditions—the United States has operated an illegal, unilateral blockade that tries to force countries from around the world to stop doing basic commerce with Cuba. The new restrictions focus on oil. The United States government has threatened tariffs and sanctions on any country that sells or transports oil to Cuba.

Conversion laws and national identity: A Jesuit response response to the Hindutva narrative

By Rajiv Shah A recent book, " Luminous Footprints: The Christian Impact on India ", authored by two Jesuit scholars, Dr. Lancy Lobo and Dr. Denzil Fernandes , seeks to counter the current dominant narrative on Indian Christians , which equates evangelisation with conversion, and education, health and the social services provided by Christians as meant to lure -- even force -- vulnerable sections into Christianity.

Search This Blog