Negative IIP growth is extremely disappointing: Industry

Posted By: Staff
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Negative IIP growth is extremely disappointing: Industry
New Delhi: Expressing disappointment over the factory output numbers for March, India Inc Monday said the new government should implement quick and bold reforms in order to boost manufacturing sector's growth.

"The outlook for the manufacturing sector, as things stand, seems to be disappointing and bleak. Weak demand and investment conditions continue to plague the sector.

"We look to the next Government and hold out strong hope that quick and bold reforms and implementation will enable a high growth path where manufacturing will play a significant role," Ficci President Sidharth Birla said in a statement.

He said that the industry is looking at announcements in new Budget and Foreign Trade Policy to boost manufacturing and investment.

"We also hope that there will be supporting steps from the Reserve Bank on the monetary policy side," Birla added.

Sharing similar views on on the IIP data, CII Director General Chandrajit Banerjee said that the negative growth of industrial production is "extremely disappointing".

"What is a matter of major concern is the low consumption and investment demand which is contributing negative growth of the manufacturing sector," Banerjee said.

He said that the negative growth of consumer durables reinforces that the sector continues to be stymied by the high interest rates prevailing in the economy.

"The weak industrial scenario should propel the new government to send out strong signals that it is committed to growth," he said, adding that top priority should be given to reviving investor sentiment by ensuring that cleared projects in the manufacturing and infrastructure sector take off on the ground.

Showing no signs of recovery, factory production remained in negative territory for the second month in a row, contracting 0.5 percent in March due to declining output in manufacturing, especially capital goods.

Output as measured by the index of industrial production (IIP) remained almost flat in 2013-14 and declined 0.1 percent compared with an expansion of 1.1 percent in 2012-13. The IIP showed growth of 3.5 percent in March 2013.


Read more about: iip, industry
Story first published: Tuesday, May 13, 2014, 10:04 [IST]
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