Manufacturing sector to recover in second quarter: FICCIJuly 21st, 2009 - 4:52 pm ICT by IANS
New Delhi, July 21 (IANS) Despite high interest cost and falling exports, India’s manufacturing sector will recover in the second quarter this fiscal, says a report by the Federation of Indian Chambers of Commerce and Industry (FICCI).
“Indian manufacturing sector is likely to witness more than a moderate growth with eight out of the 10 sectors surveyed reporting not only positive but also high growth for July-September 2009 vis-a-vis same quarter last year,” said the FICCI report.
“The eight sectors that are expected to witness high growth are metal and metal products, machinery and equipment, automotive, chemicals, leather, electronics and miscellaneous industry,” it added.
The FICCI survey was carried out for the first two quarters this fiscal based on the responses received from over 250 firms.
At the same time, FICCI said, credit rate was as high as 16 percent, rendering Indian manufacturers uncompetitive globally.
“Banks are reluctant to lend to SME (small and medium enterprises) as many of them had earned losses in the previous year and hence banks are insisting on credit ratings for these borrowers,” FICCI said.
According to the chamber, banks are now asking for a higher value of collateral security than the sanctioned limit.
It said the textiles sector continued to be a “source of worry” with most respondents saying the sectoral production in the second quarter this fiscal would be lower than in the corresponding period last year.
“However, the fall in production seems to have bottomed-out in textiles sector in July-September 2009,:” FICCI said.
On the exports front, the FICCI Survey said five out of the 10 manufacturing segments would witness a fall in exports in July-September, as compared to the corresponding quarter last year.
The five sectors are textiles, metals, tyres, chemicals and miscellaneous industry.
However, it added, exports in the July-September quarter is slightly better than that in April-June, when eight out of 10 segments reported a fall in exports.
- Rising raw material cost dampening manufacturing growth: Ficci - Dec 11, 2011
- Indian economy hit by high inflation, slowing growth (2011 in Retrospect) - Dec 28, 2011
- Business confidence on the decline: CII survey - Sep 04, 2011
- As factory output shrinks, India Inc. demands lower interest rates (Roundup) - Dec 12, 2011
- Manufacturing sector growth to pick up in April-June: FICCI - Mar 08, 2009
- Industrial output grows by 8.6 percent - Feb 25, 2011
- More than 500,000 jobs added in second quarter: Economic Survey - Feb 25, 2010
- As industrial output contracts, industry clamours for lowering rates - Dec 12, 2011
- India's quarterly growth retards to two-year low (Roundup) - Nov 30, 2011
- Unfavourable levies hit Indian manufacturing: FICCI - Aug 12, 2012
- Manufacturing sector growth to slow down further - Nov 20, 2011
- GDP growth may slow to 7.3 percent in 2011-12: Pranab - Nov 30, 2011
- Manufacturing sector to slow down: Surveys - Sep 11, 2011
- India's 8.9 percent July-September growth beats forecasts (Roundup) - Nov 30, 2010
- Rising cost of capital to hit manufacturing growth - Mar 15, 2011
Tags: better than tha, borrowers, chambers of commerce, chambers of commerce and industry, collateral security, ficci, high interest, indian chambers of commerce, indian manufacturers, manufacturing sector, metals, moderate growth, New Delhi, previous year, respondents, second quarter, sectors, segments, small and medium enterprises, textiles