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Introduction Heavy industries relates to a type of business that typically carries a high capital cost (capital-intensive), high barriers

to entry and low transportability. The term "heavy" refers to the fact that the items produced by "heavy industry" used to be products such as iron, coal, oil, ships, etc. Another trait of heavy industry is that it most often sells its goods to other industrial customers, rather than to the end consumer. Heavy industries tend to be a part of the supply chain of other products. As a result, their stocks will often rally at the beginning of an economic upturn and are often the first to benefit from an increase in demand. Pattern analysis of heavy industries in India In year 2001Capital Goods recorded a growth rate of 1.8 per cent as compared to 7.5per cent recorded in the corresponding period of last year. In year 2002 the overall Industrial growth, and by sectors and classes also suggest an all Around Slowdown in industrial activity. , registered a significantly lower growth rate of 5.0 per cent in 2000-01 compared to a growth rate of 6.7 per cent in 1999-2000.The performance in capital goods in the current year (April-December 2001-02) decelerated sharply, recording a decrease of4.8 per cent compared with a growth rate of 3.0per cent recorded in the corresponding period of last year In year2003 growth in capital sector was in state of recovery there are 5 constraints which enhance the overall industrial sector reservation of SSI, high customs tariffs, relaxation in labor laws, competion in market, distortions in indirect taxes laws etc. In 2004 The significant growth acceleration in capital goods production to 13.3 per cent in April-December from 10.1 per cent in the same period of the previous year indicates a possible step-up in investment activity. Machinery and equipment, with a growth rate of 21.9 percent, remained the major contributor to the impressive growth in the capital goods sector

In year 2005 The double-digit growth since 2003-04 in capital goods sector indicates the capital formation taking place in the industrial sector, which can help in strengthening the upswing. Industrial buoyancy is expected to continued using the remaining period of 2004-05 with the strong growth of machinery and equipment sub-sector (21.9 per cent during April-December) and the major components of nonoil imports like machinery and other inputs The strength and robustness of industrial growth during the current financial year are particularly striking in the light of the shocks like Tsunami, a deficient monsoon and a third oil shock. Such resilience in the midst of resurgence is not just a matter of good fortune; but also a response to the reforms and manifestation of the sound fundamentals of the economy. The strong and positive outlook of both foreign and domestic investors indicates that India is ready for the big push as the growing interest of foreign investors is coinciding with the rising confidence of domestic private investors. The increasing efficiency and competitiveness of domestic producers, liberalised trade, and deregulated interest rate regime are critical contributors to both growth acceleration and macro-economic stability. In year 2006 high growth in the industrial sector continued for the third year in succession. Capital goods maintained a steady increase in its rate of growth during 2004-05.The sector is poised to increase its rate of growth further during the current year. In year 2007 The expected overall annual growth of industry in the Tenth Plan period (2002-2007)at around 8.7 per cent is likely to be short of the targeted growth rate of 10 per cent for the Plan period Capacity additions through investment is critical for accelerating growth in industry. The investment scenario looks quite optimistic , particularly with rising domestic savings rates and FDI inflows. Sustained economic growth, fiscal consolidation and an enabling policy environment will continue to provide incentive to capacity addition in industry and sustain high growth. There are a number of positive developments that brighten the industrial outlook in the medium term. First, there has been a commendable growth in the capital goods sector, especially in industrial machinery, which, along with strong imports of capital goods, augurs well for the much required industrial capacity addition. Secondly, the inherent strength of industrial corporates, manifested in the increase in profits

and profitability and strong investment plans, Confirms the strength of the growth prospects in the medium term. Thirdly, the high investment plans made for infrastructure during the Eleventh Five Year Plan are expected to gradually alleviate the infrastructural constraints to industrial development. Moreover, the bourgeoning direct investment in flows in the liberalized investment regime supplements the domestic investment to a great extent In year 2009the growth of the industrial sector started to slowdown in the first half of2007-08, the overall growth during the year remained as high as 8.5 per cent. The industrial sector witnessed a sharp slowdown during 2008-09 as a consequence of successive shocks, the most important being the knock-on effects of the global financial crisis. The pace of slowdown accelerated in the second half of 2008-09 with the sudden worsening of the international financial situation and the global economic outlook. The year 2008-09 thus closed with the industrial growth at only 2.4 percent as per the Index of Industrial Production (IIP). In year 2008 cyclical slowdown in the industrial sector that began in 2007-08 got compounded by the twin global shocks in 2008-09. The effects lingered on briefly in the current fiscal; but growth rebound is amply evident. Given the size of the Indian market and the unmet demand for industrial products, coupled with the fact that the overall GDP has started to exhibit growth momentum, there is reasonable hope that demand would not by itself be a constraining factor. Besides, despite the significant step-up in the Government borrowing programme, domestic financial market and external resource flows have given the impression that raising investible resources would not be a major problem. All these factors, combined with the inherent strength of industrial corporates exemplified by the resilience shown by them against adversities in the recent past brighten the industrial outlook in the medium term.9.101 The emerging investment picture is yet to become clear. Growth in the production of capital goods is improving, but different components of the capital goods group have shown a mixed picture during the current year so far. In any case, growth in the indigenous production of capital goods cannot by itself be used to comment on investment and capacity expansion, because, there has, of late, been significant growth in imported capacity addition.

In year 2009the growth of the industrial sector started to slowdown in the first half of2007-08, the overall growth during the year remained as high as 8.5 per cent. The industrial sector witnessed a sharp slowdown during 2008-09 as a consequence of successive shocks, the most important being the knock-on effects of the global financial crisis. The pace of slowdown accelerated in the second half of 2008-09 with the sudden worsening of the international financial situation and the global economic outlook. The year 2008-09 thus closed with the industrial growth at only 2.4 percent as per the Index of Industrial Production (IIP).

In year 2010 continued buoyancy in corporate sales, comparatively higher credit flow to industry, larger number of investment intentions across all major industries and States, accelerated growth in some sectors, and robust merchandise exports so far are likely to sustain industrial activities in the remaining months of the financial year. Over the medium to long term, to sustain double-digit output growth and reduce the vulnerabilities of the sector, there is need to put in place a policy framework for embarking on another round of multifaceted reforms.

Trend of IIP Year Growth y-o-y(capital intensive industries ) 2001 1.8 2002 -3.4 2003 10.5 2004 13.6 2005 13.9 2006 15.8 2007 18.2 2008 7.0 2009 7.7 2010 13.95 SOURCE: ECONOMIC SURVEY

IIP GROWTH(Capital intensive industries)


20

15 10
5 0

IIP GROWTH(CAPITAL GOODS)

2001 2002 2003 2004 2005 2006 2007 2008 2009


-5

INTERPETATION In year 2001 Growth of capital intensive industries has gone down significantly due to industrial slow down; however it has recovered in consecutive years due to planned policy changes i.e. relaxation. Again in 2008 IIP witnessed a slow down due to the global economic crises however it has been recovering gradually.

REFERENCES WWW.INDIABUDGET.NIC.IN WWW.INVESTOPEDIA.COM

TERM PAPER (ACM-955) ON PATTERN ANALYSIS OF HEAVY INDUSTIAL SECTOR

SUBMITTED TO: DR. saurabmani SUBMITTED BY: Ishan shanker M.phil 1st sem DAYAL BAGH EDUCATIONAL INSTITUTE, AGRA (DEEMED UNIVERSITY) APRIL-2013

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