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An Analysis of industrial Growth in India

Abstract

Since independence, India has achieved a good measure of self-

sufficiency in manufacturing a variety of basic and capital goods. The
output of the major industries includes aircraft, ships, cars,
locomotives, heavy electrical machinery, construction equipment,
power generation and transmission equipment, chemicals, precision
instruments, communication equipment and computers. Early planners
in free India had to keep in mind two aims: all-round development and
generation of large-scale job opportunities. Economic development
strategies were evolved with an eye on these twin objectives.

Introduction

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I. An Overview ;

India has been one of the best performers in the world

economy in recent years, but rapidly rising inflation and the
complexities of running the world’s biggest democracy are
proving challenging. Like most of the world, however, India is facing
testing economic times in 2008. The Reserve Bank of India had set an
inflation target of 4%, but by the middle of the year it was running at
11%, the highest level seen for a decade. The rising costs of oil, food
and the resources needed for India’s construction boom are all playing
a part. India has to compete ever harder in the energy market place in
particular and has not been as adept at securing new fossil fuel
sources as the Chinese. The Indian Government is looking at
alternatives, and has signed a wide-ranging nuclear treaty with the US,
in part to gain access to nuclear power plant technology that can
reduce its oil thirst. This has proved contentious though, leading to
leftist members of the ruling coalition pulling out of the government.

II. Methodology

Methodology includes a philosophically coherent collection of theories,

concepts or ideas as they relate to a particular discipline or field of
inquiry Methodology refers to more than a simple set of methods
rather it refers to the rationale and the philosophical assumptions that
underlie a particular study relative to the scientific method with in the
industry. This is why scholarly literature often includes a section on the
methodology of the researchers. Methodology can be "the analysis of
the principles of methods, rules, and postulates employed by a
discipline, the systematic study of methods that are, can be, or have
been applied within a discipline" methodology tells you what you have
to do, to manage your projects from start to finish. It describes every
step in the project life cycle in depth, so you know exactly which tasks
to complete, when and how. Whether you're an expert or a novice, it
helps you complete tasks faster than before growth standards

III. The Growth Scenario

Sectoral Trends of Indian Economy

The different sectoral trends of Indian economy has been

encouraging for the investors. The astronomical rise of the Indian
industry across all verticals have facilitated the growth of Indian
economy. The main contributors for the overall rise of the different
sectoral trends of Indian economy has been the manufacturing and
service industry. Today, India along with china is regarded as the
manufacturing hub of the world. In the service sector India still
holds dominating position in the world market

A. The investment industry in India

 India's equity market has doubled since March 2009, with ADRs like
Dr. Reddy's Laboratories and Tata Motors only getting doubled and
tripled. So, do we say that the Indian investment industry is
overheated at the moment or may we infer that the stocks are fairly
valued?

Warren Buffett has always mentioned that investment in India

should always be a long-term story - as the industry has been
growing from an emerging market to a developed one. The next 10
years in India will surely give good returns.

India's GDP growth would be around 6.5% to 7% in 2010. The

sustainable growth rate of India would however hover around 7%.
Before becoming a mature economy, India has another 20 to 40
years to spare

B. Trends in Automobile Industry in India

Potential of the Automobile industry

In 2008, Hyundai Motors alone exported 240,000 cars made in India.

Nissan Motors plans to export 250,000 vehicles manufactured in its
India plant by 2011. Similar plans are for General Motors.

Turnover of Automobile Manufacturers(In USD Million)

Year In USD Million
2002-03 14,880
2003-04 16,544
2004-05 20,896
2005-06 27,011
2006-07 34,285

The figures show that the automobile sector in India has been growing
robustly. The market shares of the different types of vehicles will
clearly depict the demand pattern in this sector.
C. Trends in Cement Industry

India, being the second largest cement producer in the world after
China with a total capacity of 151.2 Million Tones (MT), has got a huge
cement industry. With the government of India giving boost to various
infrastructure projects, housing facilities and road networks, the
cement industry in India is currently growing at an enviable pace. More
growth in the Indian cement industry is expected in the coming years.
It is also predicted that the cement production in India would rise to
236.16 MT in FY11. It's also expected to rise to 262.61 MT in FY12.

The cement industry in India is dominated by around 20 companies,

which account for almost 70% of the total cement production in India.
In the present year, the Indian cement companies have produced 11
MT cement during April-September 2009. It took the total cement
production in FY09 to 231 M

D. Infrastructure Industry in India

In view of their crucial importance, power, transport and other

infrastructure industries are owned by the State. As a result of
special attention given to the area in recent years, the
infrastructure industries have been growing at the rate of 9 to 10
per cent annually.

Power: The generation of power has increased impressively in

recent years. In 1990-51, India generated 6.6 billion-kilowatt hour
of electricity, in 1995-96 the figure was 380.1 billion-kilowatt
hour. The installed capacity, which was 1400 MW at
Independence in 1947, has crossed 83,288 MW The policy of
inviting private sector has been well received; about 140 offers
that can generate over 60,000 MW of power have came in.

Coal: Coal is the primary source for power generation in India.

The country has huge reserves of coal approximately 197 billion
tons. A sufficient amount of lignite (brown coal used in thermal
power stations) is also available.
 India produced about 270 million tons of coal in 1995-96. The
government now welcomes private investment in the coal sector,
allowing companies to operate captive mines.

Petroleum and Natural Gas: The recent exploration and

production activities in the country have led to a dramatic
increase in the output of oil. The country currently produces 35
million tons of crude oil, two thirds of which is from offshore
areas, and imports another 27 million tons. Refinery production in
terms of crude throughput of the existing refineries is about 54
million tons.

Natural gas production has also increased substantially in recent

years, with the country producing over 22,000 million cubic
meters. Natural gas is rapidly becoming an important source of
energy and feedstock for major industries. By the end of the
Eighth Five-Year Plan, production was likely to reach 30 billion
cubic meters.

IV. Analysis and Interpretation

Sectoral Trends of Indian Economy

• India's economy grew at 9.3% in quarter April 2007-June 2008

and it was driven by manufacturing, construction and services
sector and agriculture sector
• GDP factor for the first quarter of 2007-08 was at Rs 7,23,132
crore, registering a growth rate of 9.3% over the corresponding
quarter of previous year
• Manufacturing registered 11.9% growth
• The passenger vehicles sector grew by 11.61% during April-May
2007
• Electricity, gas & water supply performed well and recorded an
impressive growth rate of 8.3% ,and Construction growth rate
rose to 10.7%
 • Trade, hotels, transport and communication registered a growth
rate of 12%
• Financing, insurance, real estate and business services recorded
an impressive growth rate of at 11% during the 1st quarter of
this fiscal
• Community, social and personal services maintained a decent
growth rate of 7.6%
• The growth rate of agriculture, forestry & fishing’ and ‘mining &
quarrying’ are estimated at 3.8 per cent, and 3.2 per cent,
respectively during the 1st quarter of 2007-2008
• Exports grew by 18.11% during the 1st quarter of 2007-2008 and
the imports shoot up by 34.30% during the same period
• India's FOREX reserves (excluding Gold and SDRs) stood at
$219.75 billion at the end of July ' 07
• The food sector is estimated to be of US$ 200 billion and it is
expected to grow to $310 billion by 2015 ,Stocks of food-grains
grew by 13.1% to 17.73 million tonnes
• The annual inflation rate was 4.45% for the week ended July 28,
2007
• India's Balance of Payments is expected to remain comfortable
• Merchandise Exports recorded strong growth

V . References

o Industrial growth in india

www.business.maoofindia.com/investments-industry
o Sustainable economy www.siemen.com/wef
o On line traders www.sherkhantradetiger.com
o Indian Accounting Review,