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Wheels of revival

In what is definitely a good news for the country's economy in general, a new survey from CII shows that India's manufacturing picked up momentum in the period April-March 2009-10. The comprehensive CII m-ASCON survey for the period April-March 2009-10 covering more than 100 sectors reflects impressive growth across sectors.
Revival of growth is evident in almost all industrial groups under manufacturing sector including basic goods, consumer durables and capital goods. As per the Survey, Capital goods and Consumer durables have been the key drivers of growth.
"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 Chandrajit Banerjee, Director General, CII.
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.

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Sectors registering excellent growth (more than 20%): Passenger cars, LCVs, Natural gas, phosphate Fertilizer ,cutting tools, Earth moving and construction equipments, tractors, Air conditioner ,color T.V, microwave oven, etc.
Sectors registering high growth (10-20%): Aluminum, cement, motor starters, capacitors, auto components, ball and roller bearing, electric motors, computer hardware and rubber footwear.
Sectors registering moderate growth (0-10%): Steel, crude oil, caustic soda, Soda ash, Power cables, Energy meters, Air and gas compressor, transformer, glass products.
(Sectors registering negative growth: Cast iron spun pipe, refinery, polymers like HDPE, switch gears, telecom cables, telecom equipments, machine tools.)

Concerns: The Survey highlighted some areas of concern for the manufacturing sector in general. These 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.
Reforms: It also suggested reform measures and incentives to boost manufacturing. These include 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.