‘Increasing negative growth in manufacture sector alarming’

August 3rd, 2008 - 12:58 pm ICT by IANS  

New Delhi, Aug 3 (IANS) Even though almost half of the manufacturing sectors are in the excellent growth and high growth category, the sectors reporting negative growth have increased due to high input costs, said a survey by an industry body. The survey carried out by the Confederation of Indian Industry (CII), said the increase in the interest rates was likely to impact the overall manufacturing growth.

Out of a total of 100 sectors reporting production, seven sectors reported excellent growth rate of more than 20 percent and 40 sectors recorded high growth rate of 10-20 percent.

It added that 32 sectors recorded a moderate growth rate of less than 10 percent and 21 sectors recorded negative growth rate.

The survey also showed increase in the percentage of sectors in negative category from 16.35 percent to 21 percent for the period April to June 2008.

CII director general Chandrajit Banerjee said: “It could be seen that there is increase in percentage of sectors in the high growth from 30.7 percent to 40 percent, if compared to the last survey. It reflects that industry is learning to cope with the difficult situation emerging out of high interest costs and spiralling input prices.

“However, the emerging situation needs to resolve itself soon since industry has only limited capacity to keep absorbing these cost escalations,” Banerjee added.

“It is important that non-fiscal initiatives by government be taken up at the earliest to keep up the investment pipeline. This is the right time to take initiatives that would de-bottleneck the supply side,” said the CII release.

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