Journal Press India^®

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The present study overviews the macroeconomic scenario in India with special reference to manufacturing sector and attempt to address the need and potentiality of manufacturing sector for economic growth and creation of employment. The study covers the post economic reform period where industry and services sectors were major contributor for national income and output. The study focuses on role of manufacturing sector in structural transformation of the Indian economy in twenty first century; the study covers the economic growth stories of major developed and developing nations which have been major industrialized countries in the world. The present study uses simple growth rate and compounded annual growth rate for comparing the performance of manufacturing industries in India during post reform period. The foreign investment inflow, profits, bank credit and gross capital formation in manufacturing industries have been boosting the manufacture exports in India while exchange rate is insignificant to influence the manufacture exports in the long run. The percentage of manufacturing exports in total exports has declined to 64.1% in the financial year 2013-2014 from 77.1% in 2000-2001, which indicates the slowing manufacture exports performance. The results showed that India has potential capability to expand her economic growth through expansion of manufacturing sector and in order to succeed make India concept, the government need to take positive policy actions regarding business friendly economic policies such as more bilateral and multilateral agreements, flexible FDI policies, low tax rate, speedy implementation of the projects, accommodation of good infrastructure, more importance for labor productivity through skill enhancement, innovation and technological improvement. 

Keywords

Economic Growth; GDP; Manufacturing Export; Exchange Rate; FDI & FII; OLS Regression

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