Business regulatory envn needs bold reforms, industry feels, as Aug IIP remains subdued
Updated: Oct 11, 2014 02:59:05pm
New Delhi, Oct 11 (KNN) Despite the optimist mood of consumers during the festive season, the industrial production growth remained subdued at five-month low of 0.4 per cent in August calling for bold reforms in the business regulatory environment.
Factory output measured in terms of the Index of Industrial Production (IIP) growth remained slow in August mainly due to contraction in manufacturing output and lower offtake of consumer goods.
The index had also grown at a meagre rate of 0.4 per cent in August, 2013.
IIP for July was also revised downwards to 0.41 per cent from the provisional estimates of 0.5 per cent released last month, according to the data released by the Central Statistics Office on Friday.
According to the IIP data, manufacturing -- which constitutes over 75 per cent of the index -- contracted by 1.4 per cent in August, compared to 0.2 per cent decline in output a year ago. For April-August, the sector grew at 1.8 per cent, compared to 0.1 per cent contraction in the year-ago period.
The consumer goods output contracted by 6.9 per cent in August against 0.9 per cent decline logged a year ago. For April-August, the segment showed contraction of 4.9 per cent, compared to a decline of 1.6 per cent in the same period of 2013-14.
Consumer non-durable goods output too declined by 0.9 per cent in August, compared to 5.4 per cent growth in same month last year.
The production of capital goods contracted by 11.3 per cent in August, against 2 per cent decline in same month of last year, the CSO data showed.
The mining sector grew by 2.6 per cent in August against a dip of 0.9 per cent a year ago.
Power generation, however, increased by 12.9 per cent in the month under review compared to 7.2 per cent growth a year ago.
Production of intermediate goods expanded by just 0.3 per cent in August, compared to 3.8 per cent growth a year ago. Basic goods output grew 9.6 per cent in August against a growth of 0.9 per cent a year ago.
Overall, 11 of the 22 industry groups in manufacturing showed positive growth in August.
Commenting upon the IIP data, industry body FICCI said, “Negative manufacturing growth reinforces the belief that fall in manufacturing growth has not yet bottomed out. It is more worrisome to see\\negative growth in consumer and capital goods especially when we were hoping the demand to pick up.”
“This requires bold reforms in the business regulatory environment and also certain specific interventions in those sectors that continue to reel under slowdown" said Secretary General, FICCI, A Didar Singh.
Confederation of Indian Industries (CII) said, "There is a need for taking ... Steps to revive investment and stimulate demand in the economy. This would entail expediting execution of approved projects and providing a competitive market for coal and mining sectors."
CII Secretary General Chandrajit Banerjee hoped that the recent announcements and policy actions like 'Make in India' initiative, ensuring flexible labour policy, etc would help the turnaround. (KNN/SD)
Factory output measured in terms of the Index of Industrial Production (IIP) growth remained slow in August mainly due to contraction in manufacturing output and lower offtake of consumer goods.
The index had also grown at a meagre rate of 0.4 per cent in August, 2013.
IIP for July was also revised downwards to 0.41 per cent from the provisional estimates of 0.5 per cent released last month, according to the data released by the Central Statistics Office on Friday.
According to the IIP data, manufacturing -- which constitutes over 75 per cent of the index -- contracted by 1.4 per cent in August, compared to 0.2 per cent decline in output a year ago. For April-August, the sector grew at 1.8 per cent, compared to 0.1 per cent contraction in the year-ago period.
The consumer goods output contracted by 6.9 per cent in August against 0.9 per cent decline logged a year ago. For April-August, the segment showed contraction of 4.9 per cent, compared to a decline of 1.6 per cent in the same period of 2013-14.
Consumer non-durable goods output too declined by 0.9 per cent in August, compared to 5.4 per cent growth in same month last year.
The production of capital goods contracted by 11.3 per cent in August, against 2 per cent decline in same month of last year, the CSO data showed.
The mining sector grew by 2.6 per cent in August against a dip of 0.9 per cent a year ago.
Power generation, however, increased by 12.9 per cent in the month under review compared to 7.2 per cent growth a year ago.
Production of intermediate goods expanded by just 0.3 per cent in August, compared to 3.8 per cent growth a year ago. Basic goods output grew 9.6 per cent in August against a growth of 0.9 per cent a year ago.
Overall, 11 of the 22 industry groups in manufacturing showed positive growth in August.
Commenting upon the IIP data, industry body FICCI said, “Negative manufacturing growth reinforces the belief that fall in manufacturing growth has not yet bottomed out. It is more worrisome to see\\negative growth in consumer and capital goods especially when we were hoping the demand to pick up.”
“This requires bold reforms in the business regulatory environment and also certain specific interventions in those sectors that continue to reel under slowdown" said Secretary General, FICCI, A Didar Singh.
Confederation of Indian Industries (CII) said, "There is a need for taking ... Steps to revive investment and stimulate demand in the economy. This would entail expediting execution of approved projects and providing a competitive market for coal and mining sectors."
CII Secretary General Chandrajit Banerjee hoped that the recent announcements and policy actions like 'Make in India' initiative, ensuring flexible labour policy, etc would help the turnaround. (KNN/SD)
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