New Delhi, May 11 (KNN)  Notwithstanding government’s attempt to bring manufacturing contribution to 25 per cent of the total economic activity by 2020, its share to gross domestic product fell to 15.2 per cent in 2012-13, according to an ASSOCHAM study.

“The share of manufacturing in India’s gross domestic product came down to 15.2 per cent in fiscal 2012-13 and is expected to fall below 15 per cent in the current financial year since the sector is facing slowdown and unutilised excess capacity,” said ASSOCHAM.

Its share in GDP was 16.2 during 2010-11 and 15.7 per cent in the fiscal 2011-12.

The study said that major initiatives announced to boost manufacturing had not yielded the desired results.

“The government has been insisting on taking share of manufacturing to 25 per cent of GDP and major initiatives were announced to make manufacturing vibrant part of the economy, which depends pre-dominantly (as much as 60 per cent) on services. Depending too much on services is not good for India because our manufacturing could not scale upto the global standards in the first place,” it said

In line with the laggard performance of the manufacturing the share of total industrial output in the GDP has also come down from 28.2 per cent in 2010-11 to 27 per cent in 2012-13. 

Exports to EU which accounts for 16.3 per cent in India’s merchandise exports, declined by 11.2 per cent, while those to Asian countries, (excluding Japan) with a share of 28.1 per cent, contracted by 8.4 per cent during April-September 2012.

Infrastructure bottlenecks and regulatory hurdles for mega projects are major hindrances in taking a leap forward in industrial activity.  (KNN)