Manufacturing - matter of concern or hope?

In the first half of the financial year, the national productivity is stable enough (GDP - 7.8%) instead of global recession.The industrial sector witnessed a slowdown and will remain in single digit growth throughout this year, as the country faces various headwinds including an appreciating rupee, poor infrastructure and rising borrowing costs. According to global credit rating agency Moody's “The combination of softer domestic and decelerating external demand, particularly from the United States, India's largest export market, is expected to weigh heavily on India’s industrial sector in the coming months,” Moody’s Economy.com’s Director of Asia Pacific Economics Ruth Stroppiana has stated. Though the communications, finance,hotels,transport have grown healthy, manufacturing sector has registered major decline(only 5% growth) as compared to the previous year.

The diminishing demand of capital & consumer goods of US (major importer) & the European countries fueled the slowdown of the mining & power sector growth . So the reduced production of electricity has forced agriculture to grow only at 2.7%.

But do not worry . According to a response of more than 340 of the world's largest international manufacturing companies—from Europe, the Americas and Asia Pacific—in a study by Capgemini, a global consultancy major , India is set to threaten China as the world's backyard for manufacturing in the next three to five years. It says companies are planning to offshore manufacturing activities primarily to India that will surpass its information technology activities. The govt. has taken several initiatives to turnaround country's manufacturing sector by introducing Special Economic Zones, which offers a virtual tax-free regime. There are also other projects including agro processing parks, textile and garments parks, industrial infrastructure development plans and the like, which are essentially to enable manufacturing units to share infrastructure, mostly created by the government. Excise duties have already been made much softer in important sectors such as textiles and metals.

Mumbai - face of terror

It is another sad day when , we are experiencing the impact of terror on the common lives of Mumbai. Do you know that Terrorism coming through arabian sea! The security archtecture of India is under threat. We are one of the major forces in the world. But the efficiency of operation , level of intelligence & responsiveness of our security agencies have not been updated over years of demestic development. Is it the result of burocracy which delayed the security effectiveness! I wonder sometimes about the serious planning & courage of terrorists to attck the financial capital of the second fastest growing economy. We can not expect any anti-offensive action from our Govt. In the past also we experienced the same trend except the Kargil issue where we were forced to fight. Can't we take the actions like the Russians over chehens & the israil commando operation over the Palestinians , to send strong message to the terror world & to demonstrate to the world that the dignity of man, human life and human freedom constitute the highest value !

This terror has caused severe damage to the hospitality industry directly. In the period of recession, airlines , hotels, tourism agencies are facing bad days. Now security bacame the threat to them. The consumer sentiment will cause further slowdown to these sectors as well as the allied industries. Even it can cause employment crunch in the coming days. Though we felt good to observe many RBI initiatives to revive the economy & the lower trend of price of the Prime mover CRUDE OIL , we can not see a upward trend until we don't take care of these kind of environmental threats.