Manufacturing Current Affairs - 2019
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According to data released by the Central Statistics Office (CSO), India’s factory output, measured by Index of Industrial Production (IIP) recorded overall 7.5% growth in January 2018, indicating early signs of industrial revival.
Factory output grew at 7.1% in December 2017, before hitting 25-month high of 8.4% in November 2017. The cumulative IIP growth for period of April-January over corresponding period of previous year was 4.1%.
Manufacturing sector: It increased to 8.7% in January 2018 as compared to 8.5% in December 2017. It was led by improved production of consumer durables and continued double-digit growth of consumer non-durables as well as capital goods.
Mining output: It recorded growth of 0.1% in January 2018 compared to 1.2% in December 2017.
Electricity generation: It recorded 7.6% growth in January 2018, as compared 4.4% growth in December 2017.
Capital goods output: It is a barometer of investment and considered as proxy to measure private sector investment activity. It was 14.6% in January 2018 compared to 16.4% in December 2017.
Consumer durables output: It was 8% in January 2018 as compared meagre 0.9% rise in December 2017.
Consumer non-durables production: It recorded 10.5% growth in January 2018 from 16.5% in December 2017.
Index of Industrial Production (IIP)
The IIP is composite indicator that measures short-term changes in volume of production of basket of industrial products during given period with respect to chosen base period. It is compiled and published monthly by Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
Base year: The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in the economy and improves the quality and representativeness of the indices. The revised IIP (2011-12) reflects the changes in the industrial sector and also aligns it with base year of other macroeconomic indicators like the Wholesale Price Index (WPI) and Gross Domestic Product (GDP).
Sector wise items and weightages: It covers 407 item groups. Sector wise, the items included falls into 3 categories viz. Manufacturing (405 items), Mining (1 items) & Electricity (1 item). The weights of the three sectors are 77.63%, 14.37%, 7.9% respectively. The revised 8 core Industries have combined weightage of 40.27% in IIP.
The World Economic Forum (WEF) has ranked India at 30th position among 100 countries on its Global Manufacturing Index (GMI).
The index was released as part of WEF’s first Readiness for the future of production Report which analysed development of modern industrial strategies and urges collaborative action.
Readiness for future of production Report
The report was developed by WEF in collaboration with A.T. Kearney. It analyses and measures how well positioned 100 countries will shape and benefit from changing nature of production through adoption of emerging technology as part of Fourth Industrial Revolution in production. It calls for new and innovative approaches to public-private collaboration are needed to accelerate transformation.
It has categorised 100 countries into four groups viz. Leading (strong current base, high level of readiness for future), High Potential (limited current base, high potential for future), Legacy (strong current base, at risk for future) or Nascent (limited current base, low level of readiness for future).
Key Highlights of Report
Top 10 countries in GMI: Japan, South Korea, Germany, Switzerland, China, Czech Republic, United States, Sweden, Austria and Ireland.
BRICS nations: China (25th), Russia (35th), Brazil (41st) and South Africa (45th). China was placed among ‘leading countries’. Indian and Russia were placed in ‘Legacy’ group while Brazil and South Africa are in ‘nascent’ ones.
The 25 ‘leading’ countries were placed in best position group to gain as production systems stand on brink of exponential change. No country was placed in frontier of readiness group.
About India: It is 5th-largest manufacturer in world with total manufacturing value added of over US $420 billion in 2016. Its manufacturing sector has grown by over 7% per year on average in past three decades and accounts for 16-20% of India’s GDP. Demand for Indian manufactured products is rising.
India was ranked 9th in terms of scale of production and at 48th place for complexity. It was ranked 3rd for market size. It was ranked poorly (90th or even lower) in parameters like female participation in labour force, trade tariffs, regulatory efficiency and sustainable resources.
Overall, India ranked better than its neighbours Sri Lanka (66th), Pakistan (74th) and Bangladesh (80th). Other countries that ranked below India include Turkey, Indonesia, Canada, Australia, New Zealand, Mauritius and UAE.
World Economic Forum
WEF is independent international organization committed to improving state of world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. It was incorporated as a not-for-profit foundation in 1971. It is headquartered in Geneva, Switzerland.