The large-scale manufacturing (LSM) sector has historically been one of the dynamic sectors in the national economy. For example, in the first decade of the current century it achieved a very high rate of growth of 7.5 percent annually with the overall economy being supported in achieving a growth rate of over 4.5 percent. This process of growth was facilitated by the export-led growth in manufactures of 7.3 percent annually.

Thereafter, we have seen a cyclical process of growth in the sector. From 2018-19 onwards to 2024-25, cumulatively there has been no increase in value-added, at constant prices of 2015-16. It has remained virtually constant at Rs 3,275 billion. This is unambiguous evidence of the stagnation of the large-scale manufacturing over the last six years. In fact, the Quantum Index of Manufacturing (QIM) in 2024-25 is 1 percent below the level in 2018-19.

Examination of the disaggregated data on the performance of individual industries reveals that some major industries have suffered big declines in output since 2018-19. This includes cotton yarn, cotton cloth, cement, cigarettes and steel products, with average annual rates of decline ranging from 1 percent to 9 percent. This is in sharp contrast to the performance of these industries from 2000-01 to 2006-07 with virtually all these industries achieving a double-digit rate of growth.

Fortunately, from 2018-19 to 2024-25, some industries have continued to show some growth, including industries such as fertilizer, vegetable ghee, sugar and paints and varnishes. However, this was not enough to compensate for the decline in other industries, especially textiles.

The outcome in the short-run, in 2024-25, is also of a decline. The QIM has registered a fall of 0.7 percent. Last year, industries, which showed a decline in output, include food products, cement, iron and steel products, fertilizer, sugar and various consumer durables. Fortunately, there has been a strong recovery in the automobiles and petrol products industries of 46.1 percent and 11.9 percent, respectively. However, here again the positive growth has........

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