Friday, August 20, 2010

Rosy days ahead for India’s manufacturing sector: CII

In a latest survey of Indian industry and its growth prospects, the Confederation of Indian Industries (CII) has revealed that the manufacturing sector in the country will maintain buoyant growth levels in the next two quarters of the current fiscal. 

In a report of CII ASCON survey published on the CII website, the central industrial agency maintained that the second quarter, July to September 2010, will witness slight drop in the growth rates for the industry. 

“Even though the recent hike in policy rates by RBI may have an impact on industry’s growth trajectory, business sentiment remains positive and industry members expect the growth momentum to remain strong in the next two quarters,” said Chandrajit Banerjee, Director General, CII. 

The survey indicated the sectors that are expecting to grow at an excellent rate include automotive, electronics & consumer durables, ball & roller bearing and forging. Other sectors like tractors, electric fans, machine tools are also expected to perform fairly well in the next two quarters. 

Out of 110 sectors covered by the survey, 27 sectors are expected to register excellent growth rate of more than 20%, 30 sectors are expected to record high growth rate of 10-20%, 42 sectors are expected to record moderate growth rate of 0 to 10% while 11 sectors are expected to be in the negative zone in the quarter July-September 2010. 

The third quarter October-December 2010 of the current fiscal, is expected to be better than the second quarter, July-September 2010 in terms of more sectors recording excellent and high growth rates. 

Out of 110 sectors, 32 sectors are expected to record excellent growth, 40 sectors are expected to record high growth. Consequently, the number of sectors recording moderate and negative growth is expected to decline to 32 and 6 respectively. 

The CII-ASCON survey also highlighted some of the issues faced by the industries including the early implementation of GST, which would help improve competitiveness, retaining the present levels of CENVAT and excise rates, corrections in inverted duty structures and simplification of taxation procedures and laws. 

Rise in the cost of raw material, Infrastructure bottlenecks, threat of Chinese imports, inadequate credit supply are other major concerns which need to be addressed by the government to enable industry to maintain higher growth momentum, the industrial agency maintained. 

The CII ASCON survey is based on interactions with more than 350 respondents from various manufacturing industry associations representing about 4000 manufacturing companies. The survey covers a wide spectrum of sectors including Basic goods, Intermediate goods, Capital goods, Consumer Durables and Non Durables. 


No comments: