Kerala just behind Karnataka in manufacturing excellence: Assocham

KOCHI: Kerala is second only to Karnataka in terms of manufacturing excellence across mainstream states across India, noted a recent study conducted by apex industry body Assocham.

“Kerala has second highest ratio in terms of road density, third highest ratio in terms of efficiency and fourth highest capacity utilisation ratio denoting state’s performance in these parameters during the course of past five years,” stated an Assocham study titled ‘Manufacturing Excellence and Emergence in India: The state level analysis.’

Besides, Kerala also has recorded third lowest ratio in terms of employee cost and sixth highest manufacturing process ratio, the report noted.

The Assocham Economic Research Bureau (AERB) had considered various parameters like number of factories, output value, working capital, net fixed capital formation, fixed capital, finished goods, capital invested, total inputs and others to ascertain the states’ performance in terms of the manufacturing sector.

Though Kerala has performed decently on parameters like interest cost whereby there is a lower ratio between total interest paid in the current year for loans outstanding in the previous year. Also on the front of rail density, a higher ratio in terms of rail route length in 2014-15 as a proportion of total area of state is better.

However, Kerala needs to work towards improving its performance in areas like the growth of industries (13th rank), capital structure (16th rank) i.e. improving the ratio between invested and fixed capital. Besides, the state also needs to register improvement in terms of bringing down input cost as it ranks 16th in total input cost as a proportion of value of output (lower ratio is better).

The study also highlighted various challenges being faced by India’s manufacturing sector – competitive cost and technology being offered by countries like Bangladesh, China, Indonesia, Korea, Singapore and Taiwan.