Significance of Key Sectors in the Economy

In India the share of manufacturing sector in GDP has remained constant since the mid 1960s. It has hovered around 16 to 17 percent and never
crossed 20 percent. As a result, the share of Industry (of which manufacturing constitutes a major part) has been below 30 percent.

Source: World Development Indicators

 Growth of Indian Industry

Traditionally the manufacturing sector has grown slower than the Electricity sector but this trend has changed since
mid 1990s.
Both mining and electricity sector, which are primarily under the public domain, have faced declining growth rates since the mid
80s.Out of all the components of the Industry sector, in recent years the manufacturing sector has witnessed the highest growth.

Source: CSO, India

 Growth of Components of Manufacturing Sector

A decomposition of the manufacturing sector into Registered and Unregistered

components, shows that the Registered manufacturing sector has been growing
at a significantly higher rate than Unregistered manufacturing sector.

Source: CSO, India

 Performance of the Manufacturing Sector

It can be clearly seen that the latest upswing in the manufacturing sector growth rates, since the fourth quarter of 2001-02
has been longest one since 1980s. The decadal trendlines show that the trend growth had been highest in the 1980s.
Thereafter there was hardly any trend growth in the decade of the 90s. However, since 2000, Manufacturing sector is again
witnessing strong trend growth.

Source: CSO, India

Comparison of the Manufacturing with Other Core Sectors

The Manufacturing sector has grown at a faster rate than primarily publicly owned Coal, Electricity and Crude Petroleum sectors.
However, sectors like Steel and Cement, which are divided between public and private ownership have done better than the
manufacturing sector.

Source: CSO, India

 Change in Composition of the Manufacturing Output

• This is only for the Registered Manufacturing Sector

• The composition of the Indian manufacturing sector has altered in the last 25 years.
• Food Beverages and Tobacco constitute the largest part at 16%
• Chemicals come in a close second and even its share has been constant around 14 percent
• Coke Petroleum and Nuclear Fuel have increased its share from less than 8 percent to 14 percent
• Textiles witnessed the biggest decrease in share. Its share fell from 15% in 1980-81 to 8 percent in 2003-04.
• Share of Motor Vehicles have gone up from 4 to 6 percent.
• Basic and Fabricated Metals have maintained a relatively constant share around 15 Percent. Although in the early 90s they
witnessed an increase in the share.

Source ASI India

 High Technology Exports

Compared to other major developing countries, India’s share of high technology exports in overall exports has been
abysmally low. It has increased from less than 3 percent in 1992 to less than 5 percent in 2004. In China, high technology
exports account for almost 30 percent of total manufactured exports. In Korea this ratio is 33 percent, whereas in
Malaysia it is 55 percent.
Definition: High-technology exports are products with high R&D intensity, such as in aerospace, computers,
pharmaceuticals, scientific instruments, and electrical machinery.
Source: United Nations, COMTRADE database.
 Change in Composition of Indian Manufactured Exports

There has been a significant change in the composition of Indian exports. India has moved away from traditional
exports like Apparel and Textiles to newer products like Chemicals and Engineering Goods

Source: India Trades Database