30% Productivity Boost Could Drive 35% of Future Manufacturing in India
India's manufacturing sector could achieve 35% of its future output with a 30% productivity increase, according to KPMG's analysis of over 130 companies. Productivity leaders saw significantly higher profit growth and market value.
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What Happened?
India's manufacturing sector could achieve 35% of its future output with a 30% productivity increase, according to KPMG's analysis of over 130 companies. Productivity leaders saw significantly higher profit growth and market value.
Why it matters
Improving productivity could significantly enhance India's manufacturing output and economic growth.
Key points
- A 30% productivity increase could enable India's manufacturing sector to achieve 35% of its future output.
- KPMG's analysis covered over 130 large manufacturing companies over a decade.
- Companies improving productivity faster saw net profits grow by 10-11% annually.
- Productivity leaders recorded a 19% CAGR in market capitalization compared to nearly 10% for average firms.
- More than 70% of large manufacturers need transformative measures for productivity growth.
- Small factories produce less than 20% of the output per worker compared to larger firms.
Key insights
- The report highlights that productivity is the most powerful growth lever for Indian manufacturing, embedding benefits over time.
- Transformative measures are essential for over 70% of large manufacturers to meet productivity goals.
- The stark productivity gap between small and large factories indicates a need for targeted support and investment.
- Digital tools and changes in workplace culture are crucial for achieving the necessary productivity improvements.
AI Quick Summary
KPMG's analysis reveals that a 30% productivity boost could enable India's manufacturing sector to achieve 35% of its future output.
Source
Times of India
