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Career call: Turning the wheels again

After facing slump for eight long years, the Indian manufacturing industry is emerging. While cheaper finance and liberalisation have scripted the turnaround story this time, the roll forward will need more talent, writes Gaurav Choudhury. Earn as per your skillsTips and tricks

india Updated: Aug 10, 2007 01:45 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times

Software is great and business process outsourcing is wonderful. But the trouble is that you can’t eat software or wear a BPO product.

India’s economic buzz in the past decade or so has been about knowledge-based service industries. But it is important to remember that the nation of 100 crore people whose economy is growing at 9 per cent needs things that people wear, ride, use or eat. So the manufacturing industry may have lagged behind the glamorous white-collar service industry in recent years, but it is central to an economy.

What this means is that jobs and careers can be sought, if you are technically inclined or believe more in work connected with touching and feeling things. The industry consists of establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.

According to skills measurement agency MeritTrac, the percentage of people employed in manufacturing is expected to increase to 21 per cent by 2020 from the current 19 per cent. The industrial sector as a whole contributes a little over 27 per cent to India’s gross domestic product, and of this, the manufacturing industries contribute around 15.5 per cent.

While China is emerging as a global leader in the industry, India has its own manufacturing story. India’s manufacturing sector recorded a growth of around 12.3 per cent in 2006-07, steadily rising from 6.6 per cent in 2003-04. Industry was sputtering for about eight years since the mid-1990s. Manufacturing, too, began to suffer.

But many of its segments have bounced back since then. Cheaper finance, more liberalisation, a growing population, newer technologies and focused management have helped many of these turnaround stories.

According to a study by HR consulting firm Elixir Web Solutions, the rate at which foreign investments are proceeding nearly 10 million people would be joining the manufacturing sector workforce annually till 2015.

"This will follow the pattern of more and more people moving into the manufacturing and service sector activities from agriculture and farm activities. This will further have a direct impact, as salaries and incomes will see a definite rise, hence augmenting the standards of living," the study says.

The flip side is that India’s vaunted ‘demographic dividend’ can become a ‘demographic deficit’ due to a shortage of skills.

"The challenge lies in harnessing the productivity and nurturing the potential talent pool to avoid turning the dividend into a liability. Skilled Indian manpower will be the country’s legal tender of the world," Lt Gen (retd) SS Mehta, director-general of the Confederation of Indian Industry, told Hindustan Times.

A Federation of Indian Chambers of Commerce and Industry survey said that shortage of skilled, semi-skilled and unskilled workers have emerged as a critical factor impacting the competitiveness of Indian industry.

Experts say the segments that would require the maximum number of jobs would also see the largest shortages. Those that are expected to hire the most include food processing, oil and gas, textiles, mining, heavy engineering, automotives, plastics, chemicals and petro-chemicals, paper and glass.

The emergence of special economic zones (SEZ) is also expected to drive growth in manufacturing employment. In the next five years, investments by SEZ developers are expected to be over $60 billion (Rs 2,40,000 crore). According to estimates of the Union commerce ministry, the over-350 SEZs are expected to provide direct employment to over 4 million people.

During 2006-07, FDI (foreign direct investment) equity inflow reached a level of $16 billion — a 185 per cent increase over the previous year. Such investments will also directly or indirectly create manufacturing jobs.

Manufacturing can be suitable to those who enjoy working in factories, dealing with machines or designing or dealing with assembly lines. Building skills for that would be at the heart of a career in manufacturing.

First Published: Aug 05, 2007 22:53 IST