India Inc has expressed concerns over the soft industrial growth data and increase in retail inflation and further highlighted need for some bold measures with a renewed thrust on manufacturing to instill confidence among investors and boost economic growth. Tempering optimism about a strong economic recovery, India’s annual industrial output growth, measured by index of industrial production (IIP), slowed down to 3.4% y-o-y in the month of June as compared to 4.7% in May. Meanwhile, retail inflation inched up to 7.96 percent in July from 7.31% in June due to higher prices of food items.
CII Director General Chandrajit Banerjee has asserted that industrial production was mainly impacted by the sluggish performance of the manufacturing sector. The output of manufacturing sector, which occupies 75.52% weightage in the overall index, slowed down to 1.8% in June from 4.8% growth in May. By adding further, Banerjee has stated that the government should introduce industry favorable land, labour and environment norms, which could promote ease of doing business in the country.
Assocham President Rana Kapoor has stressed that as India's industrial output slowed unexpectedly while inflation accelerated, it is early to say that a decisive rebound in Indian economy and bold measures are required to boost the investors’ confidence. Meanwhile, Ficci President Sidharth Birla has said that industrial production seems to have bottomed out and steps taken by the Government so far and measures announced in the budget would help in further revival of the sector. During the April-June period of the current fiscal, IIP has recorded a growth of 3.9 percent, as against contraction of 1 percent in the first quarter of 2013-14.