Owing to demand slowdown, the manufacturing sector’s contribution to the country's Gross Domestic Product (GDP) is expected to fall below 15% in 2013-14, leading to unutilized excess capacity. The industrial production during March improved to 2.5%, the factory output during 2012-13 worked out to be only 1%, down from 2.9% in the previous fiscal.
According to an ASSOCHAM survey, decline is witnessed in the backdrop of government aiming to bring manufacturing contribution to 25% of the total economic activity within a decade, but the trend is certainly moving in the reverse direction. During 2012-13, the share of manufacturing sector in the GDP declined to 15.2%, compared to 15.7% in the previous financial year.
However, the manufacturing sector, which constitutes over 75 percent of the Index of Industrial Production (IIP), grew by 3.2% in March as against a decline in output by 3.6% in the same month of 2012. Further, for the current fiscal, the government has projected economic growth at above 6%.
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