IIP growth remains sluggish; India Inc pitches for bold reforms to spur industry

As industrial production growth remained subdued in August, India Inc has pitched for bold reforms to spur the domestic industry. Factory output growth measured in terms of the Index of Industrial Production (IIP) slowed down to five-month low at 0.4% in the month of August mainly due to the contraction in manufacturing output and lower offtake of consumer goods.

Sector wise, the output of manufacturing sector declined by 1.4% in August as compared to de-growth of 1% in the previous month. Electricity sector grew by 12.9% in the reported month as against 11.7% in July and mining sector output grew by 2.6% as compared to 2.1% in the previous month.

CII Secretary General Chandrajit Banerjee has asserted that there is need to revive investment and stimulate demand in the economy. Further, steps to be taken to expedite the execution of approved projects and providing a competitive market for coal and mining sectors. He also expects that government’s recent announcements and policy actions like 'Make in India' initiative ensuring flexible labour policy, etc should help the turnaround.

FICCI Secretary General A Didar Singh stressed that negative manufacturing growth reinforces the belief that fall in manufacturing growth has not yet bottomed out. It is more worrisome to see negative growth in consumer and capital goods sectors especially at a time when the country is hoping that the demand to pick up. Capital goods production witnessed a contraction of 11.3% in August as against a de-growth of 3.8% in July. Consumer durables sector witnessed a massive contraction as the sector’s production declined by 15% in August as compared to 20.90% contraction in the previous month.