Productivity in the Industrial Sector

Productivity in the industrial sector is an interlinked relationship between the amount of inputs and outputs that are required to produce or manufacture desired products. Productivity in the industrial sector can be measured by measuring or determining the efficacy of the production.

The factors which may influence the productivity of the industrial sector include policies of Government, quality of the resource, technological advancements, capital, natural factors and management.

Industrial Sector:

Industrial sector is a broader sector which is a segment of an economy and is made up of different kinds of businesses that provide help to other businesses in terms of manufacturing, producing, shipping, transporting, exporting the desired products and services. Supply and demand are the two important factors which regulate the growth of the industrial sector.

Index of Industrial Production:

The Index of industrial production is abbreviated as IIP. It is an index for India which gives details about the growth of various sectors in an economy including mineral mining, electricity and manufacturing industries.

India IIP is a composite indicator which helps to measure the short term changes in the volume of production of industrial products during a given period of time with respect to base period.

IIP is published on a monthly basis keeping a gap of six weeks by the National Statistics Office (NSO).

It is calculated by the average weight of production relatives of all the industrial activities. In the mathematical calculation, Laspeyres fixed base formula is used for calculation.

IIP is considered as an important data as it is released after market hours and is watched by stock market analysts to understand the economic momentum. IIP is also an important indicator for the Reserve Bank of India while framing its monetary policy.

Classification of Industrial sector:

Most economists divide the industrial sector into three types which include primary secondary and tertiary sectors.

• Primary Sector

The primary sector is a type of industrial sector which is mainly concerned with the extraction and utilization of raw materials or natural resources extracted from the land. Any kind of business that involves growing goods or extracting materials from the land would be considered as a primary sector

Examples of industrial sectors that operate in the primary sector are farming, mining, fishing or production of oil

• Secondary Sector

The secondary sector of the industrial sector is associated with manufacturing of goods or products. The raw materials used in the manufacturing of products are taken from the primary sector and then converted into new products

Examples of sectors that operate in the secondary sector are manufacturing of cars, production of foods, building of companies and manufacturing tools and utensils

• Tertiary Sector

The tertiary sector of the industrial sector is connected with providing services to its customers. These services are the activities that are mainly done by people or business men for their consumers

Examples of businesses that operate in the tertiary sector are caterers, hairdressers, banks, supermarkets, and cinemas

Sometimes, the quaternary sector is also included in the tertiary sector as they both provide services to their consumers. Services provided by the quaternary sector include research and development, drug discovery, information and communication technologies.

FMCG Sector:

The FMCG sector stands for Fast-moving consumer goods. The FMCG sector is also known as consumer packaged goods (CPGs). The FMCG sector includes the products which are quickly sold at a very low cost. The FMCG sector has a very good turnover. Many retail shops, supermarkets, warehouses and many more only sold FMCG products.

Examples of FMCG include household goods such as packaged foods, beer & beverages, toiletries, chocolate, candies, cosmetics products, over-the-counter drugs, dry goods, and other consumables in daily lives.

Characteristics of FMCG Sector:

The main characteristics of FMCG sector are as follows:

• Frequent purchase by the consumers
• Affordable or low price products
• Rapid consumption
• Short shelf life of the products
• Low engagement in choosing products
• Have very high volumes
• High inventory turnover
• Very quick or extensive distribution of the products

FMCG Sector in India:

The FMCG sector in India plays a very important role in developing the economy of the country. 

In the Indian economy, the FMCG sector is the 4th largest growing sector. Nearly 50% sales in the FMCG sector includes the sales of households and personal care products. Healthcare products contribute to about 31% sales and 32% sales are contributed by food and beverages products.

FMCG sector products can be classified  into several different categories which includes the followings:

• Processed foods such as cheese products, and cereals
• Prepared meals include ready to eat meals
• Beverages such as water bottles, energy drinks, and juices
• Baked goods include cookies, donuts and cakes
• Fresh foods include all fruits and vegetables, as well as raisins and nuts
• Medicines include all pain relievers, and other over the counter medication
• Cleaning products such as Baking soda and glass cleaners
• Cosmetics and toiletries include hair care, toothpaste, and soaps
• Office supplies which include pens, notepads and pencils

Some of the factors that leading the growth of FMCG sector are:

• Increased in the number of the population of working women
• Increased of disposable income and growing per capita expenditure
• Due to the increment in purchasing power of the customers
• Increased in the awareness of online shopping
• Government’s rules and regulations to promote FMCG products

Industrial Sector Policy: 

Industrial sector policies are the set of documents which helps in implementing, promoting the roles of the industrial sector. It is an effort made by the government in order to boost up the economic growth of the country and reach its desired heights. The industrial sector of the country is guided and regulated by its industrial policies.

Objective of Industrial Sector Policy:

The main objective of industrial sector policy which are set by the government are as follows:

• To maintain a sustained growth in productivity
• To enhance gainful employment
• To achieve optimal utilization of human resources
• To attain international competitiveness
• To transform India into a leading partner and player among the global countries

Benefits of Industrial Sector:

The major benefits of industrial sector include the following:

• Large scale production of goods lead to cheaper rates
• Rise in the living standard among people
• Play a important role in economic upliftment
• Creates employment opportunities
• Large scale exportation of products