New Delhi, May 10 (IANS) Industry associations Friday said overall slowdown in the country’s economic activity would constrain manufacturing growth and an accommodative monetary policy regime would help spur investment.
Not very upbeat about the factory data for March 2013, they said the mining sector and consumer durables could also add to the worry.
“The growth of 3.2 percent in manufacturing comes over a negative base and can hardly be looked as a revival in manufacturing. Overall slowdown in economic activity and consumer demand continues to constrain manufacturing growth. Also, the growth within manufacturing is highly concentrated amongst top five high growth sectors in 2012-13 thereby weakening the chances of any sustainable growth in near future in manufacturing,” FICCI president Naina Lal Kidwai said.
India’s industrial output grew by 2.5 percent in March, as against a contraction of 2.8 percent in the corresponding month of 2012, government data showed Friday.
“Looking at the financial year 2012-13 data, it is evident that the growth in manufacturing is constrained by shortage of power and subdued growth of core sectors of the economy,” Kidwai said.
Manufacturing production registered a growth of 3.2 percent during the month under review from a deceleration of 3.6 percent in the corresponding month last year. In February, the sector registered a growth of 2.2 percent.
“A 2.5 percent growth over a negative base of -2.8 percent in March last year indicates that a robust and broadbased growth is elusive for the sector. What is creating concern is the growth of the mining sector which continues to be in the negative terrain. Similarly, the negative growth of consumer durables indicates subdued demand conditions reinforcing our view that the sector continues to be stymied by the high interest rates prevailing in the economy,” said CII director general Chandrajeet Bannerji.
CII said it is looking forward to an accommodative monetary policy regime to spur investment.
Assocham, in a statement, said that while overall the industrial performance may look better as compared to February 2013, the industry is still not out of the woods as 12 out of 22 groups in the manufacturing sector have shown a huge de-growth.
“It is a long haul before we see considerable growth. However, going forward from second quarter of the current fiscal the situation is expected to improve,” said D.S. Rawat, Assocham secretary general.