Concerned over the prevailing economic slowdown, India Inc has asserted that slow growth in economy and core sector data is bound to erode the cautious optimistic mood prevalent in the industry over the last two months. Reflecting the underlying weaknesses in Asia's third-largest economy, India’s GDP growth slowed down to 4.7 percent in the third quarter of current fiscal year, while, core sector expansion slowed to 1.6 percent in the month of January’2014.
CII Director General Chandrajit Banerjee stated that growth remains in the sub five percent level for the fifth consecutive quarter as sub-optimal output of the mining and manufacturing sectors continue to impact the economy. Assocham President Rana Kapoor stressed that owing to a compression in demand and low consumer confidence, domestic manufacturing sector is presently under pressure, which must be picked up in order to enhance the investment in the country. The manufacturing sector declined by 1.9 percent in Q3FY14 as against a growth of 2.5 percent a year ago. During the first nine months of current fiscal, the output of the sector contracted by 0.7 percent. Ficci President Sidharth Birla has emphasized that it is now difficult to achieve the full year target of 4.9 percent projected by the Central Statistics Office (CSO) as the economy must expand 5.7 percent in the fourth quarter ending March, 2014.
Further, FIEO President M Rafeeque Ahmed has stated that as the GDP growth for Q3FY14 is disappointing, policy makers should consider initiatives to step up investments from the private sector and raise funds through the public-private partnership model by making concession agreements attractive and defining exit modes in order to boost growth. Assocham Secretary General D S Rawat has emphasized that sluggish core sector performance implies that infrastructure deficiency has further widened in the current fiscal. Therefore, in order to improve core sector’s growth, there is need to address the issues linked to the pricing of gas and coal, problems associated with the power distribution policy and continued monopoly of public sector in coal production .
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