Industrial Environment and Policy

Assignment
on
Industrial Sector in India
Submitted to:
Presented By:
Prof. D.S. Hegde Sanket
Baranwal (12)
Huzefa
Ratawala (60)
Arun
Chaudhary (10)
 Introduction and historical
Evolution of Indian Industry,
GDP and IIP

Sanket Baranwal
Roll No 12
 Indian Industries – Historic
Overview
 India is basically an agrarian nation from the very beginning
 In India, the concept of industries was introduced in the
country with the coming of the British
 Tea industry in India is said to be the beginning of
industrial development of India.
 In India 3 key industrial economic sectors are identified:

 Primary sector, largely extract raw material and they are mining
and farming industries
 Secondary sector, refining, construction, and manufacturing are
categorised
 Tertiary sector deals with services and distribution of
manufactured goods.
 Indian Industry in Present times
 Different programs were formulated and initiated to build up an adequate
infrastructure for rapid industrialization and improve the industry scene in
India

 The number of industries in India have increased manifold in the last few
years

 The industry scenario in India saw a rapid increase in the various sectors .The
most noticifiable are the Software and Telecom industry

 The Indian software industry has grown at a massive rate from a mere US $
150 million in 1991-92 to a staggering US $ 5.7 billion in 1999-2000

 The IT sector has helped the India Industry to develop in leaps and bounds
 Large Scale and Small Scale
Industries
 Large scale industries are those which involve huge
infrastructure, man power and a have influx of capital assets
 They include the Iron and steel industry, textile industry,
Indian diamond industry, Indian food industry, automobile ,
heavy manufacturing industry and Petrochemicals
 Indian economy is greatly dependent on these large
industries for its economic growth, generation of foreign
currency as well as for providing job opportunities
 Small-scale industries are another major contribution to the
Gross Domestic Product (GDP) of India
 They are termed as traditional sectors and are referred to have
huge growth prospect
 The primary concern of the small-scale industries is that capital
resources are invested for the development of machineries.
 The contribution of the Industrial Sector in
India GDP
• GDP of India: Statistics
GDP: $1.209
trillion Agriculture:
GDP Growth: 6.7% 17.2%
Labour force: 523.5 (2009) Industry: 29.1%
million GDP per capita: Services: 53.7%
$1016
 The industrial sector accounts for around 27.6% of the India GDP
and it employs over 17% of the total workforce in the country.
 Data Shows that Industry Growth Rate in India GDP has been on
the rise over the last few years
The reasons for the rise of Industry Growth Rate
 Huge amounts of investments are being made in this sector
 Consumption of the industrial goods has increased a great deal
in the country
 Industrial goods are being exported in huge quantities from the
country.
 Index to measure Industrial
Performance: IIP
 IIP is an index which details out the growth of various
sectors in an economy. Indian IIP will focus on sectors like
mining, electricity, Manufacturing & General
 Indian IIP will focus on sectors like mining, electricity,
Manufacturing & General. In case of India the base year has
been fixed at 1993-94 hence the same would be equivalent
to 100 points
Method to Calculate IIP------ Laspeyre's formula:
 I = ∑ (WiRi)/ ∑ Wi.
 Where I is the index, Ri is the production relative of the ith
item for the month in question and Wi is the weight allotted
to it.
Sectoral Analysis - 1
Automobile Industry

Huzefa Ratawala
Roll no - 60
 Automobile industry
 Tenth largest in the world with an annual production of
approximately 2 million units
 Expected to become one of the major global automotive
industries in the coming years

AUTOMOBILE

PASSENGER COMMERCIAL
2 WHEELER 3 WHEELER
VEHICLE VEHICLE
India is….
• Largest three wheeler market in the world
• 2nd largest two wheeler market in the world
• 4th largest passenger vehicle market in Asia
• 4th largest tractor market in the world
• 5th largest commercial vehicle market in the
world
 Evolution of Early
Automobile
to mid 90s
Industry
Mid 90s – Early
itial Years •Seller’s market and 2000s
anufacturing was licensed long waiting periods
High Customs duty on import •Buyers market
teep excise duties & •Delicensing in 1993
ales tax •Increase in
Major players: •Removal of capacity Indigenization
emier Automobiles Ltd restrictions
Hindustan Motors •Easy Auto finance
•Decrease in
980s customs & excise •Manufactures
ntry of MUL, better product, diversifying into
th government support •Auto finance boom- related activities:
more players (foreign finance lease, fleet
eller’s Market banks & non banking management,
companies, better insurance and used
ong Waiting Periods schemes. car market
Trends in Automobile sector
Sectoral Analysis - 2
Retail Sector

Arun Chaudhary
Roll no - 10
 INDIAN RETAIL MARKET
Current
Scenario

nt the organized sector (everything other than these small fami

ses) accounts for only 6 to 8 percent of the total market although
d to rise by 20 to 25 percent by 2013.
Indian retail market is comprised of three categories. These 3-
categories and their choices are represented in the given figure. Till now a
large part of upper class and a small part of the middle class has
been entered into retail shopping. A bulk segment (97%) is still left
as only 6-7% market is captured by organized retail in India.
 REASON FOR GROWING RETAIL MARKET IN INDIA
Main reason for growing retail market in India can be outlined as –
· Rising income level in youth segment
· Nuclear family
· Growing literacy
· Growing urbanization
· Increasing media penetration
· More exposure to international brand
INDIAN RETAIL GIANTS
and products

Why to reach BOP market for retail sector

dian economy is growing at an annual rate of 8 percent. This growth is considerable when compa
of European countries, which is less than 2 percent on a 10-year average, and the growth of the Americ
y, which is approximately 3 percent. Moreover, there has been significant reduction in poverty levels
e in quality consciousness among the Indian rural and urban ‘under-served’ in the past 10 years.
Sectoral Analysis - 3
FMCG Sector

Shwetabh Anjan
Roll no - 06
Size, Growth& Significance of
FMCG Sector in India
 The Indian FMCG sector is estimated at US$ 25
billion, including tobacco.
 India’s FMCG sector is fragmented and a
substantial part of the market comprises of
unbranded and unpackaged products
 In the last 2-3 years, it has overcome a slow
growth slump to grow at between 12% - 15%, and is
expected to grow at a CAGR of around 12% over the
next few years to reach a size of US$ 43 billion by
2013 and US$ 74 billion by 2018.
 Growth Projections
 Most FMCG products are daily use products, and therefore,
their volume consumption has been largely unaffected in
the current economic slowdown.
 The sector has coped well with recent challenges and grew
by 15% over the last year.
 Economic Contribution
 Employment :The FMCG sector is one of the larger employers
in the country. The total salary outlay of the sector on direct
employment is estimated at approximately 6% of turnover, i.e.
US$ 1.5 billion (Rs. 7,000 crores).
 Fiscal Contribution: On an average therefore, almost 30%
(and much more for liquor and tobacco categories) of the
revenue of the sector goes into both direct and indirect taxes.
 Social Contribution: ITC echoupal and Choupal Sagar;
HUL’s Shakti Amma network;
Dabur.
 Contribution to other sectors: ( Agriculture, Third Party
Logistics, Ancillary Industries – Manufacturing & Distribution).
Ex: Marico : 1.6 million outlets through almost 900 direct
distributors, 100+ super distributors, catering to almost 2,500
small stockists and 4,600 van markets
Growth Drivers
Sectoral Analysis - 4
Power Sector

Naresh Dhingra
Roll no - 17
 Power Sector
• Power Sector involves
generation, transmission and
distribution.
• India is the 6th largest consumer
of electricity in the world.
• GOAL: 100,000MW of capacity by
2012 to bridge the demand
supply gap.
• This offers a US$90bn
opportunity in the next 8 years.
• Indian power sector is plagued
by high T&D losses.
• The Renewable Energy market is
growing at 15% per annum.
• Target by 2030 is 200 GW
• Renewable energy is projected to
produce 10,000 MW by 2012
 Per Capita Consumption
Current Situation (kWh)
•To sustain the Growth rate
of 8% plus per annum , the
power sector needs to
grow at 1.8 - 2 times the
GDP rate of growth.
•This would mean a YOY
capacity addition of 18,000
- 20,000 MW
•100% Rural Electrification Major Players
with Adequate & PUBLIC SECTOR G T D

Qualitative Power for National Hydro Electric Power Corporation P    

(NHPC)
irrigation purpose. Nuclear Power Corporation (NPC) P    
•Increasing the Role of National Thermal Power Corporation (NTPC) P    

Hydro & Renewable Energy PRIVATE SECTOR      

Reliance Energy P   P
in the Energy Mix. Tata Power P P P
•Urgent need to develop Torrent P   P

the alternatives, both in P = Present, G = Generation, T = Transmission, D = Distribution

the Fuel & Technology

 POWER SECTOR: The path
ahead
• Power for All by 2012
• Requirement of addition 100,000 MW by 2012
• Investment of US$ 90 billion in Transmission and
Distribution infrastructure
• Focused strategy for distribution, 100 per cent metering
and effective MIS for monitoring
• New Electricity Act 2003 is now very much in place, which
permits/offers :-
– 100% FDI in Power sector Concessional Import duty for mega
power projects (1000MW ++)
– Reduced Import duty of 20% on equipment for Renewable
Energy (Wind, Solar etc.)
– Direct Sale of Power
• Private participation in transmission and distribution sector
also invited