Reforms implementation key to turnaround growth: MontekDecember 12th, 2011 - 5:39 pm ICT by IANS
New Delhi, Dec 12 (IANS) Expressing concern over the slump in industrial output that plunged to minus-5.1 percent in October, Planning Commission Deputy Chairman Montek Singh Ahluwalia said key economic reforms need to be implemented to ensure a turnaround in the coming months.
“I don’t have a gameplan for it but we recognise that we have to take a holistic look at all aspects of the situation that may be constraining investment,” Ahluwalia told reporters while reacting on the recent slump in industrial output.
Industrial output growth has declined in the last few months and slumped into negative territory in October.
Factory output, measured in terms of the Index of Industrial Production (IIP), slumped to minus-5.1 percent in October this year as compared to 11.3 percent growth registered during the corresponding month of last year.
Reacting on the monthly data, Ahluwalia said slump in investment was the biggest concern.
“We have identified a few things that need to be done. The most important thing is to get rid of the implementation bottlenecks,” he said adding that infrastructure bottlenecks such as in coal and power sector also needed urgent attention.
“A lot of meetings are taking place in government to try and do that. If that succeeds then hopefully there will be a turnaround.” he said.
Cumulative growth in industrial output has slumped to 3.5 percent in April-October 2011 period as compared to 8.7 percent during the corresponding period of last year.
India’s overall economic growth has decelerated to 7.7 percent in the first quarter of 2011-12 and it fell further to 6.9 percent in the second quarter against the government’s budgetary target of around 9 percent.
Ahluwalia said there was no certainty whether the growth will turnaround in the third quarter of the current fiscal.
“When you see a deceleration occurring quarter by quarter you have to wait and see when deceleration turns around. So I think we need to look at the third quarter GDP numbers,” he said.
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Tags: bottlenecks, coal, cumulative growth, deceleration, deputy chairman, economic growth, economic reforms, first quarter, gameplan, infrastructure, montek singh ahluwalia, negative territory, New Delhi, planning commission, power sector, second quarter, slump, target, turnaround, urgent attention