A relatively smooth patch seems to have resurfaced in the middle of a pothole laden road for the countrys large scale manufacturing sector, which managed to register the heftiest monthly growth since December 2011.
Taking the QIM to its highest in years, the LSMI output for January 2013 jumped by more than 10 percent month-on month, while year-on year, the growth stayed close to a more subdued 2.73 percent for the first seven months of FY13.
While the overall dynamic of the nations industrial output continues on the same stuttering note, a recent upswing in apparel, yarn, paper and board production have all helped the figures keep up these appearances as an improved utilisation of capacities and higher export demand spikes up output figures.
Heavily dominated by food and textiles, the LSMI output- and all inherent growth- however remain just as depressingly myopic as ever. Sectors which demand intensive R&D endeavours- such as engineering and high technology goods- make up less than five percent of the countrys large scale manufacturing output, a fact that says a lot about the direction in which industry is headed.
In comparison to the full hearted embrace of large scale manufacturing within the developing world, the country seems akin to a rambling bunch of shopkeepers -without a prescribed vision or mission to take manufacturing capabilities out of the loop.
Operating in the backdrop of depressing energy crisis and the flagrant law and order situation, the large scale manufacturings stuttering growth has often been cited as a result of these very unfortunate circumstances. But with all due respect, a comprehensive view of the situation makes it difficult to point fingers in a single direction.
Not only do the columns of dry statistics bear witness to the lack of a hospitable environment for growth, but the dearth of technical efficiency, concrete policy making and an over- abundance of inhibitive and outmoded trade and labour laws have all been equal accomplices in a reduction of investment levels over the years.
Growing at a pace of over eight percent during the period from the 1960s to the 80s, a lack of consistency in policies slowed the growth in the LSM output during the political turmoil that plagued the 90s. And even though the growth statistics for the countrys large scale manufacturing have hardly been shabby during the last six months, a lot needs to be said of the long-term effects of this snail-paced gait.
No amount of regional trade agreements-well intentioned albeit misguided- can do the job until the core issue of competency and efficiency is addressed at the most fundamental of levels. Mere signing on dotted lines therefore is not good enough anymore.
Unless the powers that be are willing to roll up their sleeves and invest extensive resources into the development of proper frameworks that encourage growth within the most neglected of industrial segments, the LSMI growth shall remain just as narrow and restricted as it is today.
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