India continues to remain an economic bright spot despite some bold but disruptive reforms, according to a recent survey.
The FICCI-PwC India Manufacturing Barometer (IMB) survey stated that about 63 per cent of respondents were “somewhat optimistic” about the prospects of the Indian economy for the coming year, representing a significant jump over last year’s 58 per cent.
“There is greater optimism about the Indian economy compared to last year. The manufacturing industry is looking to focus on new products/services, IT, and expanding its facilities in select sectors,” Nilesh Narwekar, Partner, PwC strategy said.
Lack of digital culture and talent is a key internal challenge. As the industry prepares for immediate changes like GST implementation, the key expectation from the government continues to be the creation of a clear, stable policy environment that can facilitate long-term business and investment planning, he added.
Around 25 per cent of those surveyed were very optimistic about the future prospects of the India economy, while a large section believed growth would be in the range of 7-8 per cent.
Conversely, 62 per cent respondents expressed uncertainty about the global economy, an 8 per cent increase from last year.
The survey covered companies in eight key sectors including automotive and auto components, cables and transformers, capital goods, cement, chemicals, downstream metals, packaging, and plastics and polymers.One critical action for the manufacturing industry is the adoption of Industry 4.0 or a new level of organisation and control over the entire value chain of the life cycle of products, geared towards increasingly individualised customer requirements.
Manufacturing companies here are now spearheading growth through innovation and emerging new technologies.
“The government’s policies and projects have offered new opportunities to the manufacturing sector in areas of urbanisation, smart cities, digitisation and defence. We hope to see recovery in the sector in months to come as a result of the reforms and projects initiated by the government in the last few months,” Puneet Dalmia, Chairman, FICCI Manufacturing Committee said.
Compared to 51 per cent last year, 66 per cent of the respondents mentioned they would be focusing on introducing new products and services in the coming year.
Further, 52 per cent respondents stated that they would be increasing investments in IT compared to just 21 per cent last year.
As much as 86 per cent are expecting investments in Industry 4.0 related initiatives to increase in the next 3-5 years and 45 per cent respondents expect to benefit both from revenue growth and cost reduction or efficiency improvements, it said.