A survey conducted by industry body CII and ASCON revealed a significant rise in the sectors displaying negative growth in the third quarter of the current fiscal even as high growth sectors shrank considerably.
The survey found that industrial activity in the October- December 2013 quarter remained subdued and grim, treading along the growth path of the previous quarter.
“It is of utmost concern that the majority of segments in basic, intermediate, and capital goods sectors continue to fall in ‘low’ growth bracket during October-December 2013,” CII Director General Chandrajit Banerjee said.
According to the survey, 31 sectors out of total 110 sectors (28.18 per cent) witnessed contraction or negative growth in 2013 compared to 21 sectors out of total 101 sectors (20.8) in 2012.
Meanwhile, high growth sectors shrank to 10.90 per cent (12 sectors out of 110 sectors) in Oct-Dec 2013 from 18.8 per cent (19 sectors out of 101 sectors) in Oct – Dec 2012.
“This continuous trend of slow and deteriorating industrial growth outlines the weakened economic health of the economy,” the survey pointed out.
However, the survey also showed a modest drop in the number of sectors witnessing low growth at 52.72 per cent (58 out of 110 sectors) as compared to 56.4 per cent (57 out of 101 sectors) in the same quarter of previous year.
Besides, the percentage of sectors reporting excellent and high growth in current quarter is 19 per cent (21 out of 110 sectors) as compared to 16.8 per cent (17 out of 101 sectors) in the same quarter previous year.
In the Oct-Dec quarter, high-tech electronics such as lED/lCDs and computer tablets are amongst the segments that have recorded excellent growth apart from the scooter and scooterettes segment.
Tractors also recorded excellent growth reflecting improved performance of the farm sector. “To improve the prevailing downturn in the economy, strong emphasis needs to be given on reviving investments in manufacturing, expediting clearance of delayed projects, easing investment climate for manufacturing. Though there is some movement in infrastructure projects, the industry looks forward to a strong action on all these aspect to provide impetus to growth in the economy,” Banerjee added.
Meanwhile, the continuing low or negative growth seen in the capital goods sector reinforces the view that new investments are impacted. The Survey respondents raised concerns over the weakening of the economy and stagnation in manufacturing growth.
The global economic uncertainness continues to prevail and impact the growth of investments and exports in the country. Rising inflation, stalled investments, subdued consumption, inverted duties and anomalies further add to the economic downturn. Respondents have stressed on the need for reviving the investments, rationalizing taxation structure and increase infrastructure spending to kick start the investment and growth in the economy.