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Home arrow News arrow Business News arrow Indian Manufacturing sector on higher growth trajectory in Apr-Sep 09 :Survey
Indian Manufacturing sector on higher growth trajectory in Apr-Sep 09 :Survey Print E-mail
Written by Vivek   
Tuesday, 24 November 2009
New Delhi: The latest comprehensive CII m-ASCON survey has revealed that India’s manufacturing sector shows signs of revival and is in on the higher growth trajectory in the first half of the current fiscal (April-September 2009). The survey reveals that the buoyant manufacturing growth in the first half of 2009-10 over the corresponding period of the last year is led by rise in production of basic, intermediate and consumer durables.

"This improvement in manufacturing growth has been a result of the stimulus packages announced by the government" said Mr Chandrajit Banerjee, Director General, CII.

The survey revealed that around 10% of the sectors covered have registered excellent growth rates of more than 20% in April- September 2009 compared to 7% in April- September 2008.

The share of the sectors registering moderate growth rate has significantly declined to 35.8% in April-September 2009 from 42.6% in the corresponding period of the previous year. The share of the sectors recording negative and moderate growth rates have also declined to 64.21% from 66.36% in the previous corresponding period.

Sectors reporting excellent growth rates are nitrogen gas, phosphate, motor starters, argon, industrial gasses, nitrogen, oxygen, earth moving and construction equipment and multi purpose vehicles (MPVs), etc.

26 sectors have recorded high growth of 10-20% in April-Sept 2009 compared to 27 sectors in April-Sept 2008. Some of these are aluminum, cement, fertilizers, paints, polymers like PS, circuit breakers, gases like carbon dioxide & hydrogen, refractories, pumps, light commercial vehicles (LCVs), cars, scooters, mopeds, motor cycles, other consumer durables like consumer electronics and home appliances.

37 sectors have registered moderate growth of 0-10% in April-Sept 2009 compared to 43 sectors in April-Sept2008. These include crude oil, diesel, LPG, Nitrogen fertilizer, plastics, refinery, soda ash, power cables, capacitors, auto components, personal computers, ceramics, electronic components, industrial valves, synthetics like PSF & PFY, oil & gas equipment, transmission line towers, three wheelers, automotive tyres, glass products, paper & newsprint, etc.

However, some sectors continue to report negative growth during Apr-Sept 2009 including caustic soda, cold rolled steel strips, lead & lead alloy, polymers like HDPE, LDPE  LLDPE, PP& PVC, sponge iron, switch gears, energy meters, abrasives, ball & roller bearings, fluid power, electric motors, machine tools, power transformers, textile machinery, M&HCVs, tea, edible oils like groundnut , soya and sunflower, etc.

Sales data have also witnessed improvement between the first and the second quarter of 2009-10. The sectors recording excellent growth rates comprise 19.04% of the total sectors in second quarter compared to 4.16% in the first quarter. High and excellent growth sectors in the second quarter of 2009-10 alone include cement, ceramics, tractors, consumer durables like, three wheelers, cars, LCVs, mopeds, motor cycles, utility vehicles, MPVs, scooters, etc. On the other hand, the moderate and negative growth sectors have declined to 42.8% in the second quarter from a high figure of 58.33% during the first quarter.

On the export side, the situation is still worrisome. 20 out of 29 sectors have reported negative growth rates in the first half of 2009-10. With the exception of soda ash, machine tools, cars, multi purpose vehicles & biscuits all other sectors reported negative and moderate growth rates.

The survey also identified some general and sector specific issues of concern to the manufacturing industry. The issues highlighted include reduced demand due to general slowdown, infrastructural bottlenecks, higher interest rate, inadequate availability of credit, fluctuations in the exchange rate of rupee against other currencies and cheap imports from China in respect of a number of products.

Ensuring speedier implementation of ongoing and already announced projects, improving regulatory environment, ensuring timely availability of credit and directing banks to provide easier and cheaper credit especially for SMEs are vital to enable the industry to achieve lower cost, improved quality and better performance for higher manufacturing growth.

 
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