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The share of agriculture sector that used to be regarded as the prime mover of the country's economy in the country's gross domestic product (GDP) has been on the decline for past several years. Now, the services and the industries sectors have turned out to the number one and the number two contributors respectively to the GDP. The services sector over the past few years has been maintaining its dominance in the economy, contributing near about 50 per cent to the annual GDP. But the industries sector has been making a slow but steady progress. Its contribution increased by more than 6.0 per cent over the last six financial years.
The trend in the import of raw materials and capital machinery during the first eight months of the current fiscal year (2005-06) does indicate a satisfactory performance of the industries sector. According to a report published in this daily Monday, the import of both industrial raw materials and capital machinery recorded a substantial growth during the period under review. The high import growth of capital machinery does speak of a better investment trend in the economy. Over the last few years, the performance of the agriculture sector in terms of its contribution to the economy has been erratic. In some years, the sector failed to register any growth, mainly due to natural calamities. The annual growth rate of the services sector has been rather static, ranging between 5.0 and 6.5 per cent a year. It is the industries sector that has almost doubled its annual growth rate over a period of last seven years. This is not a mean achievement, considering the hurdles the industrial entrepreneurs have to deal with all the time.
The growth trend of the industries sector which has the potential to employ a large number of people in a way proves the critics of the globalisation wrong. The steady growth in the contribution of the industries sector to the national economy makes it clear that the sector is gradually learning to live in a competitive environment created by the process of globalisation. There is no denying that there have been closures of a number of industrial units because of their inability to withstand competition and many people have become jobless. Yet then there is no alternative to competition that helps bring perfection and ensure quality. The case of the country's RMG sector can be cited here. Many market pundits had predicted collapse of the sector in the post multi-fibre arrangement (MFA) era. But they were proved wrong. The RMG industry could successfully withstand the initial setback and is now making inroads into the developed markets in the face of tough competition from exporters like China and India.
If the major hurdles such as power crisis, bureaucratic complexities, corruption, inefficient port facilities etc., could be reduced to a tolerable limit, more and more people would have invested their money in new industrial units. There are ready markets at home and abroad and the trouble with labour force -- the most dread factor in the industrial circle -- is virtually non-existent these days. Yet many prospective investors do shy away from making investment in industries because of the factors mentioned above. There is one word of caution, particularly in the context of imports. There have been allegations of flight of capital through import LCs. The authorities concerned need to verify whether the goods -- raw materials, capital machinery or anything else -- imported against letters of credit (LCs) have actually reached the country in right numbers or quantities and take stern actions against the offenders, if there is any.
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