“Increase R&D Investment & Encourage FDI’’ [June 2012]

June 19, 2012 11:47 am

Manu Gulati, Chief Executive Officer, Migatronic India suggests more investment in R&D and encouraging FDI in manufacturing to revive the manufacturing sector
NMP revives the manufacturing sectorThough the fundamentals of the Indian manufacturing sector are strong, issues like high interest rates, inflation, delays in implementing economic reforms, infrastructure development and the effects of coalition politics have had a negative impact on the sentiments of the manufacturing sector in India. The growth rate in the manufacturing sector has dipped from a robust 13-15 per cent to a less than acceptable 5 – 6 per cent. The investment in the country with regard to the manufacturing sector is not very encouraging. However with the announcement of the National Manufacturing Policy (NMP), the government has initiated steps to revive the sagging manufacturing sector that include creation of additional jobs, incentivisation of Public Private Partnership, increased spending on infrastructure projects, rationalising the regulatory environment, HR initiatives on attracting and retaining skilled manpower, emphasis on R&D and technology development.
Manu Gulati, Chief Executive Officer of Migatronic India comments, “The objectives of NMP are going to be the growth drivers for the domestic manufacturing sector and the NMP augurs well for the future as far as the manufacturing sector is concerned”.
Growth BarriersThe Indian industry has the right ingredients in achieving manufacturing excellence but what is ailing the manufacturing sector is the apathy of the establishment in tackling some basic issues – creating an attractive investment climate, policy reforms, poor infrastructure, inadequate spending on R&D and technology development, attracting and retaining quality manpower in the domestic manufacturing sector. The government has to initiate steps to promote the lagging secondary sector vis-à-vis the high growth tertiary sector. A growth in the secondary sector will have a spin off effect on the already robust services sector.
The Dollar vs Rupee FactorWelding is an allied industry to the core engineering sector; therefore the performance of welding manufacturing sector is directly proportional to the development in engineering sector. Speaking about the recent development in welding industry, Mr. Gulati said, “Any downturn in the core engineering sector is bound to have an impact on our performance. Aggravating the low growth rates in the manufacturing sector is the weakening of the Rupee against the USD and Euro resulting in a substantial increase in our input cost. The competitive nature of the welding industry does not allow us to pass on the entire increase to the customers”. However, he believes, “The company’s strategy of expanding product portfolio, degree of localisation and offering value added services has kept us abreast of any negative impact on our business”.

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