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Manufacturing Picks up Momentum in April-March 2009-10: CII m-ASCON Survey Print E-mail
Written by Ravi   
Tuesday, 11 May 2010
New Delhi: A comprehensive CII m-ASCON survey for the period April-March 2009-10 covering more than 100 sectors has revealed that India’s manufacturing sector has witnessed a strong revival in 2009-10 registering impressive growth across sectors. The revival of growth is evident in almost all industrial groups under manufacturing sector including basic goods, consumer durables and capital goods.

“While we have witnessed a remarkable revial in industrial growth in 2009-10, it is critical that this moves to a higher growth  trajectory to sustain 9% plus GDP growth. Early announcement of the comprehensive manufacturing policy aimed at encouraging the expansion of manufacturing sector is an urgent need of the hour” said Mr Chandrajit Banerjee, Director General, CII.

As per the Survey, Capital goods and Consumer durables have indeed been the main growth drivers. The hike in salaries of government and arrears after the implementation of sixth pay commission recommendations boosted demand for consumer goods. Also, improvement in availability of loans and lower interest rates facilitated enhanced consumer buying.

The CII survey revealed that out of  105 sectors covered, 30 of them had registered excellent growth rate of more than 20%  in April- March 2009-10 compared to just 8 sectors in April- March 2008-09. The number of sectors registering high growth rate have also increased from 15 in April-March 2008-09 to 25 in April-March 2009-10.

The number of sectors registering negative growth rate have significantly declined to 21 in April-March 2009-10 from 43 during the corresponding period of the previous year which is a clear sign of improvement. The number of sectors which registered moderate growth has also come down to 29 sectors from 39 sectors during the same period.

The sectors that registered excellent growth during 2009-10 include Passenger cars, LCVs, Natural gas, phosphate Fertilizer ,cutting tools, Earth moving and construction equipments, tractors, Air conditioner ,color T.V, microwave oven  etc. have  recorded excellent growth rates during April March 2009-10.

Some of the sectors that recorded high growth of 10-20% in April-March 2009-10 include aluminum, cement, motor starters, capacitors, auto components, ball and roller bearing, electric motors, computer hardware and rubber footwear.

The sectors that registered moderate growth of 0-10% in April-March 2009-10 include steel, crude oil, caustic soda, Soda ash, Power cables, Energy meters, Air and gas compressor, transformer, glass products.

The sectors including  cast iron spun pipe, refinery , polymers like HDPE, switch gears, telecom cables, telecom equipments, machine tools have reported negative growth during Apr-March 2009-10.

The CII survey has also identified some general and sector specific issues of concern to the manufacturing industry. The issues highlighted include rising cost of the raw material, 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.

The CII survey has also suggested reform measures and incentives to boost manufacturing. These pertain to ensuring speedier implementation of ongoing and already announced projects, improving regulatory environment, early implementation of the recently proposed National Manufacturing Investment Zones (NMIZ’s), while ensuring timely availability of credit and directing banks to provide easier and cheaper credit especially for SMEs. These steps are vital to enable the industry achieve lower cost, improved quality and better performance for higher manufacturing growth.

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