India’s GDP may grow 9.5% in 2008-09, if we believe the forecast of the Centre for Monitoring Indian Economy CMIE. The capacity additions will drive the surge in growth. Is it also a sycophancy of a sort, as projections by other analysts are pretty low with Lehman Brothers’ figure at 7.6% while HSBC at 7%, and JP Morgan at 7%?
It will be for industrial production and services to come out with some pretty consistent growth to achieve what CMIE predicts, and that is possible with many performing so wonderfully. Gems and jewelry export is growing fast even with all the rupee escalation. Madura Coats is doing well in textile. Many individual companies performing well through cost innovations instead of looking to government for assistance. More and more of the enterprises must learn to perform under difficult circumstances. The export target of $ 200 billion will appear feasible.
Auto sector, particularly the two wheelers, has set the example. Overall export of motorcycles went up to 7.76 lakh in 2007-08 against 5.45 lakh in 2006-07, a 42% rise. Bajaj Auto with its domestic loss of 20% achieved a 62 % increase in export totaling 4.81 lakh. Even TVS did better its export by 41%. Hero Honda remained behind and it was obviously because of the constraint from the collaborator. That’s where being indigenous becomes superior. And the Indian two-wheeler manufacturers are able to do all this against the tough competition from the manufacturing giants of China and Japan. Today’s challenge from strong competition in the face of free trade and globalization can be won only with superior quality, cost innovations and better management skills. And the commercial vehicle manufacturers were not behind. Indian commercial vehicles are outdoing those from Europe, Japan and China. Data from the Society of Indian Automobile Manufacturers (Siam) show India’s exports of commercial vehicles went up by a robust 19.10% during 2007-08 at 58,999 units against 49,537 units recorded in the previous financial year.
Even with all the slowdown in economy, the car sector could achieve a 12% growth in sales with annual figure of 12,03,531 in 2007-08 against 10,76,582 off 2006-07. In car sector, one may notice that the foreign companies such as Maruti Suzuki and Hyundai are leading the export business. Tata Motors and M&M are perhaps too busy in expanding its wing in global market with acquisitions. I do also feel that both are to do a lot of work to get an image of world class quality for its unique products such as Nano or Scorpio.
But many other developments are equally exhilarating. Even almost forgotten sectors are coming up with new ideas. Is it nice to hear that even defence shipyards are trying to get into gears and talking of collaborations with French shipbuilding giant, DCNS (Direction des Constructions Navales Services), for jointly setting up a cutting edge design centre for warships and merchant ships for both the Indian and the global markets? Will it not be great news for power sector that a private company such as L&T is joining hand with $ 63 billion Toshiba Corporation to end the monopoly of BHEL to manufacture turbines for large power plants for the upcoming mega power projects? And Tata is aspiring to get into aircraft manufacturing, while Toyota, the world’s biggest auto-manufacturer has finally decided to get into small car segment and set up the second plant in India.
It is high time when some leaders from Indian industry come with pioneering work to provide a model of manufacturing that gets decentralized up to every rural corner of India without damaging its serenity and simplicity. Without a ‘farming plus’ strategy, the rural India can’t be prosperous enough to be at par with the people of developed nations, nor the double digit GDP growth can be sustained.