Page 646 - ES 2020-21_Volume-1-2 [28-01-21]

Industry and Infrastructure 273

Gross Capital Formation in the Industrial Sector

8.12 The rate of growth of Gross Capital Formation (GCF) in industry registered a sharp rise
from 1.2 per cent in FY18 to 17.5 per cent in FY19, showing a substantive improvement in
GCF in the sector. Mining & Quarrying, Manufacturing, 'Electricity, Gas, Water Supply &
Other Utility Services' and Construction had registered a growth rate of 14.9 per cent, 15.9
per cent, 15.3 per cent, and 24.4 per cent respectively in FY19. However, the share of GCF of
the industrial sector had declined from 38.2 per cent in FY12 to 30.2 per cent of GDP in FY18
before an uptick (31.9 per cent) was recorded in FY19 (Figure 10a and 10b).

Figure 10a: Growth of GFCF in Industry Figure 10b: Share of Different Sectors in
and its share in total GFCF (Per cent) Total GFCF of Industry (Per cent)
20 Growth (LHS) 39 100

Share in GFCF (RHS) 90 19.0 20.0 13.9 17.2 15.4 16.8 19.0 20.1
15 37 80
70 25.2 24.2 25.0 25.4 28.1 25.1 21.7 21.4
35 60
10
50
33 40
5 30 50.3 49.6 49.5 52.0 52.3 53.3 53.6 53.1
31 20
0 29 10 11.6
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 0 5.5 6.2 5.4 4.3 4.7 5.6 5.4

-5 27 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Mining Manufacturing
-10 25 Electricity* Construction

*Electricity, gas, water supply & other utility services
Source: Survey calculations based on MoSPI data.

Credit to the Industrial Sector

8.13 Gross bank credit to the industrial sector, on a YoY basis, recorded (-) 1.7 growth in
October-2020 as compared to 3.4 per cent growth in October-2019. Some of the industries
recorded a nominal credit growth including the construction sectors. The laggards in the group
are ‘All Engineering’, ‘Cement & Cement Products’, and ‘Basic Metal & Metal Products’ which
recorded a YoY negative growth in October-2020 (Table 8). A long series of growth in the
industrial sector credit by banks (both nominal and real growth) and share of industrial credit in
non-food credit are presented in Figure 11a and 11b respectively.

Performance of Central Public Sector Enterprises (CPSEs)

8.14 The public sector enterprise policy enunciated by the Government in November 2020,
spells a complete change in paradigm as compared to its policy of import substitution and self-
sufficiency which became the basis of the Mahalanobis Plan in 1956. However, the inherent
inefficiencies leading to low productivity in the PSEs, high-cost structure and strained public
finances led the GoI to privatize the PSUs after 1991. Thus, began the journey of privatisation/
disinvestment in the country.