Automation industry growing at 12%

February 11, 2013 10:40 am

Automation industry growing at 12%
“Automation industry in India is approximately Rs. 12,000 crore which has a potential to grow by 15-20 per cent given the existing capacity addition in infrastructure and energy sector,” says K.Nandakumar, President, Automation Industry Association
In the last couple of years, the performance of the automation industry was less than satisfactory because other than some major oil and gas projects, there was no major investment. K. Nandakumar shares his vision and expertise as to how the automation sector can grow.
Could you brief on the recent performance on manufacturing sector in India? How is it doing comparative to global standard?In India the manufacturing sector’s contribution is less than 16 per cent of GDP, lower than the average of the developed countries. In developed countries, manufacturing contributes on an average of 25 to 35 per cent of the GDP.
Until 1991, manufacturing was predominantly driving the GDP as manufacturing was approximately 2 per cent above the GDP growth level. However, after 1991, when global integration of the Indian economy started, a lot of trading activities started picking up. This pushed down the incentive for manufacturing, and on the other hand, better and faster turnaround of products came through import trading. These have contributed to a great extent in deceleration of manufacturing in India.
Recognising the fact that the country cannot sustain in the global market with a small manufacturing base, the government and the planning body took the initiative to put a target for enhancing the manufacturing sector’s contribution to 25 per cent of the GDP by 2025.
However, to meet this target, the manufacturing sector should be able to achieve around 10-12 per cent year-on-year growth, which is a big challenge.
Isn’t enhancing manufacturing sector’s contribution to 25 per cent of the GDP too optimistic?Because of having no thrust on manufacturing for the last 10-15 years, our skills are not adequately developed for manufacturing. Although more than 7 lakh students are graduating from the engineering colleges every year, they are not readily employable as our academic curriculum is not at par with the industry requirements. That’s why the National Skill Development Council has set a target for undertaking skills development for 150 million people by 2022.
We hope manufacturing sector will pick up as the emphasis is given on skill development and infrastructure development in terms of cluster activities, common user facilities, testing and inspection facilities, and laboratories accredited to the global bodies. Incentives are also being given to promote manufacturing sector. All these activities, which are happening in parallel, will take at least a couple of years to get the momentum.
Infrastructure and energy sectors are also below the basic required limit. On these accounts, enhancing the manufacturing sector’s contribution to 25 per cent of GDP is very challenging.
Don’t you feel that the manufacturing sector has failed to attract quality human resources over the years?So far, IT has taken precedence over manufacturing. Human resources from core engineering disciplines such as civil, mechanical, electrical, chemical and to some extent electronics have been driven into the IT space as IT was paying much more than the conventional manufacturing sector.
However, nowadays emphasis is given to get these people back, and retain their latent skill in the engineering manufacturing sector. The ecosystem in the manufacturing sector is getting upgraded and comparable to IT services in compensation and working environment.
Being the President of Automation Industry Association, have you implemented any kind of initiatives to attract those resources?The Automation Industry Association has a program called “campus connect” where we engage with premier engineering colleges and IITs to encourage students to start their career in core industry sectors. Recently, AIA in association with IIT Chennai has set up a “centre of excellence” in IIT Chennai in automation.
AIA has also set up a facility to train students in Apollo Centre in Vadodara. We are bridging the gap between present day curriculum and industry demands by conducting interactive programs, conferences, and seminars on various subjects.
How do you see the growth of automation industry?The growth of automation industry in India is at an average of 12 per cent a year. The automation industry is a service provider, and its growth entirely depends on the growth of other sectors. If other sectors are stagnant or decelerating, automation sector will also have similar effect.
In the last couple of years, the performance of the automation industry was less than satisfactory because other than some major oil and gas projects, there was no major investment.

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