The large-scale manufacturing (LSM) sector has historically been one of the most buoyant sectors in the economy contributing thereby to higher GDP growth. A stellar example is from the years, 2003-04 to 2005-06, when the sector managed an average annual growth rate of almost 16 percent. The helped in achieving a GDP growth rate of over 7 percent.

The opposite trend in output and value-added by the sector has been observed since then, as shown below:

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Period Average Annual

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2000-01 to 2007-08 9.9

2007-08 to 2017-18 2.4

2017-18 to 2024-25 0.5

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During the last seven years the sector has managed growth rate annually on average of less than 1 percent. The last year, 2024-25, it saw a negative growth rate of 0.7 percent.

There has been a wide variation in the growth rate of individual industries in 2024-25. Only three industries, namely, cigarettes, beverages and cotton yarn, achieved high growth rates. However, the 13 percent growth rate in output of cigarettes was probably a reflection more of greater efficiency of the track-and-trace system.

Three industries have shown small positive growth rates of up to 1 percent. These are cotton cloth, fertilizer and paper and board. The overall growth rate of the sector has been turned negative by five industries, namely vegetable, ghee, sugar, cement, chemicals and steel products, with double-digit negative growth rates.

The almost 10 percent growth rate of the sector from 2000-01 to 2007-08 was partly the consequence of export-led growth. The textile sub-sector, within the large-scale manufacturing sector, has a share of almost 30 percent in the value-added by the sector. It achieved an increase annually of over 8 percent in the value of exports from 2000-01 to 2007-08. As compared to this, the growth rate in the value of textile exports has been below 4 percent during the last seven years.........

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