“100 million jobs – difficult but plausible” [June 2012]

June 19, 2012 10:13 am

The task of creating 100 million jobs by 2025 is difficult but a plausible target for a population of 1.22 billion people providing a captive consumption and a potential production framework to meet their own needs- Naresh T Raisinghani, CEO and Executive Director, BMGI
Service sector dominatesLike most countries across the globe, India’s GDP growth has been fuelled by the service sector since 2000. While many may want to draw solace that India is bucking a global trend of service economy, in most developed countries during their developmental cycle, manufacturing and mining have formed a decent part of the GDP share in contrast to India. Even in emerging economies such as Thailand, China and Malaysia, the current manufacturing contribution towards GDP ranges between 30 to 40 per cent. But, in India, the manufacturing sector currently contributes to merely 16 per cent to our GDP.
At an operating level, the Indian manufacturing sector is exhibiting a dual characteristic with enormous potential for growth on one hand and facing economic uncertainty on several other manufacturing sectors. Emphasising further Naresh T Raisinghani, CEO and Executive Director at BMGI said, “While certain sectors like pharmaceuticals and automobile are showing great growth in the past few years, the core sectors of engineering goods, chemicals and other component manufacturing are not able to compete globally due to quality and cost issues. This is also evident from the fact that we are hardly exporting around 8 – 10 per cent of GDP and are a net imports society with a trade deficit of around $ 185 billion”.
He further added, “Interestingly at BMGI, in the past one year, we have been receiving calls from several manufacturing businesses and entrepreneurs to help them grow at 25 – 50 per cent year-on-year in 2-5 years timeframe, indicating the vibrancy and renewed interest in manufacturing”. BMGI India is the Indian arm of BMGI Global consulting firm specialising in providing management consulting solutions to India and Asia Pacific region in strategy, innovation, problem solving and business transformation across all industries.
Manufacturing sector may contribute 25-30 per cent of our GDP There are several positive trends indicating that the Indian industry is readying itself for setting a scorching pace in achieving manufacturing excellence. Though China was the preferred destination for the West for a long time; due to wage increases and other policy changes there has been a search for alternate manufacturing locations. Expressing his optimism Mr. Raisinghani said “India is being viewed as a senior contender for becoming a world class manufacturing hub compared to other potential eastern nations. Several western and interestingly even eastern companies have started setting up new facilities in India and those who have already invested are expanding their existing facilities in India to tap into the expanding markets”.
Some specific examples are ABB and Siemens in the power sector, Volvo and several major auto players are looking at India as one of the larger manufacturing hubs in the world, while Samsung and LG plan to further strengthen their various consumer goods manufacturing infrastructure, and Airbus and Boeing showing increased interest in India besides the HAL relationship.  He further added, “There is also recognition of the contribution that Indian minds can make towards innovation and we see a shift by several MNCs such as GE, Philips, Unilever, John Deere, Airbus setting up world class R&D centres in India. If the government creates a powerful national policy favouring manufacturing, it should come as no surprise, that India increases its share of manufacturing sector to around 25-30 per cent of the GDP by 2030 from the current 16 per cent”.

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