The Confederation of Indian Industry (CII) has stated that green shoots have started to appear in the manufacturing sector, which is critical for job creation, as many segments are likely to post higher output in coming future. The CII-Ascon survey for the April-June quarter indicated that important manufacturing sectors like consumer durables including the vehicle industry and white goods industry witnessed strong recovery in output which in turn led to improvement in the overall industry growth.
The survey categorizes the growth range into four broad categories include excellent (over 20 percent), good (10-20 percent), low (0-10 percent) and negative. As per the survey, the number of sectors showing high and excellent growth (10 percent and above) have increased to 24 in the quarter April-June 2014 from 15 in last quarter in January-March 2014.
Further the survey indicated that sub-sectors such as smartphones, tablets, LEDs and LCDs have achieved phenomenal growth of over 20 percent in the reported quarter. The passenger car segment has also grown for the first time in the last two years between 5 and 10 percent. The survey added that good growth of automobile industry is mainly driven by the excise duty cuts announced in the interim budget and its extension in the Budget 2014-15 presented by the new government. Further, excise duty stimulus has also provided impetus to capital goods sector as well as the white goods segment in April-June 2014.
The CII-Ascon survey noted that key manufacturing sectors during April-June quarter had shown stability in its growth which also improved the overall industry sentiment. Meanwhile, the Manufacturing sector, which consists around 75.5% weight in the IIP, recorded a contraction of 0.8% in FY14 fiscal as compared to growth of 1.3% in FY13.