Assocham on Saturday said that it finds the latest estimates of Industrial Production as a negative sign towards the growth cycle of industrial activity in India since it is in negative territory for last three months.
January 2016 IIP numbers states the negative outlook for the economy as it is evident through General Index which is 1.5% lower as compared to the level in the month of January 2015.
“The disaggregated scenario shows that the growth in the manufacturing sector registered -2.8% for January 2016 compared to 3.4% in the same period in 2015, besides the output of capital goods, a barometer of investment, registered negative growth of -20.4% as compared to the 12.4% in January 2015 is a major area of concern and needs immediate policy intervention,” said Sunil Kanoria, President Assocham.
“The negative growth of General Index further worsens the prevailing levels of demand-supply imbalances in the country,” said Kanoria. “The significant shrinkage in the production of capital goods and consumer non-durables shows that industrial revival is going to be one of the major challenges in days to come.”
“As manufacturing forms the bulk of the IIP, excess capacity in the sector, and poor pricing power, does not present a case for a sharp turnaround in industrial growth,” he added.
Assocham asserts that though the budget’s proposals are reflective of the Government’s intent to move towards double digit growth with its emphasis on ‘Make in India’, infrastructure development, ease of doing business and continued focus on social priorities and overall development needs of the country.
However, the government must back its promises with clear action on the ground by making compliances easy and efficient.
“A number of laudable schemes and incentives have been announced in the budget, the successful implementation of these would hold the key in realizing a strong and sustained industrial growth,” further said the Assocham chief.