Manufacturing in India witnesses a 210% increase in FY22: Goldman Sachs Report

New investment and ordering activity have seen a sharp pick-up in the financial year 2021-22 and the manufacturing sector saw an increase of 210 per cent, compared with the previous financial year 2020-21, according to a report by Goldman Sachs.

 

The manufacturing sector witnessed a 460 per cent jump in 2021-22 as against 2019-20, the report added.

 

New investment announcements by the private sector saw a 145-150 per cent rise in 2021-22 in comparison to the previous financial year (FY).

 

The report further stated that the increase was aided by megaproject announcements, especially, in the steel sector. The number of projects announced also surged by 80 per cent and 140 per cent in FY22 as compared with FY21 and FY20, respectively.

 

The growth was contributed by both traditional sectors like petrochemicals, steel, cement, and automobiles, and new-age sectors like electronics, e-vehicles, and data centers, it added. 

 

Contract awarding saw an overall increase of 55 per cent year-on-year (YoY) in FY22, and the manufacturing sector saw jump of 135 per cent YoY.

 

The report further highlighted that the growth in awards for infrastructure has been decent as well, primarily driven by higher activity in the roads sector.

 

As a push to the “Make in India” (MII) initiative, the government of India had proposed Production-Linked Incentive (PLI) schemes for 13 sectors during FY21, at a proposed incentive outlay of $26.7 billion (approximately Rs 1,970 billion), excluding the PLI scheme on semiconductors.

 

Following approval of the automobiles and auto components PLI (albeit at a proposed incentive outlay of Rs 26,100 crore as against the initial proposal of Rs 57,000 crore), all the 13 proposed PLI schemes have been approved by the Cabinet.

 

Ten have received and approved bids with an incentive outlay of Rs 1,10,800 crore, excluding incentives for food products. Currently, applications are being invited for the ACC (Advanced Cell Chemistry) battery, textile, and specialty steel PLIs.

 

Engineering goods exports remained strong in February at $9.4 billion, up 33 per cent YoY.

 

Manufacturing was the key growth driver for both CAPEX and orders in the financial year 2021-22, the report said.

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