CII has expressed its concern over fall in industrial production to 3.8 percent, as this is for the first time IIP growth has fallen to such a low rate since March-2002, CII said in a release.
"It seems that the period of robust 8 percent plus growth of the last four years is coming to an end," the chamber said.
Rising interest rates continued to hit industry as its growth plummeted to 3.8 percent in may against 10.6 percent a year-ago and manufacturing and electricity generation rose by a decelerated rate.
This is the second month in a row this fiscal that the industry performed poorly with industrial growth, as reflected by the index of industrial production (IIP), dipping to 5 percent in April-May against 10.9 percent a year-ago.
"The distinct possibility has arisen that growth will be below potential in the near term," CII said and added that average growth in April-May 2008 was 5 percent down from 10.9 percent in the previous year.
"The slowdown in capital goods is especially worrisome as it indicates slower growth in investment demand. While the other sectors have been slowing down through last year, growth in the capital goods sector had remained strong," it said.
"CII appreciates the dilemma that this causes in the minds of the government and the Reserve Bank of India regarding how to balance the objectives of robust growth and low inflation," it added.
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