The PHD Chamber has expressed serious concern over the slowdown in industrial growth to 5.4 per cent in this month from 8.9% a year ago. What is worrisome is that the slowdown in demand, which was earlier restricted to the consumer goods sector, is now being spread across to all segments with the exception of consumer non-durables.

Mr. Krishan Kalra, Secretary General, PHD Chamber said that the slowdown in capital goods sector indicates that investment demand is also slowing down stoking concerns that the rising inflation and hike in interest rates and rise in input costs has made a major dent in the bottom-line of corporates which is being reflected in a slowdown in manufacturing growth. This is particularly the case with sectors such as steel, automobiles, consumer durables, textiles, metals etc. All this in turn could impact the longer term India story and we should be prepared for a deceleration in economic growth. We should be prepared for a growth of below 8% this fiscal which is a major decline after achieving over 9% growth in the last four years.

Mr. Kalra said that the prevailing situation presents a unique opportunity to the Government to hasten the reform agenda particularly in infrastructure and power. Priority should also be given to reforms in agriculture. Overall, the government should desist from continuing with tight monetary policy and lower interest rates to enhance industrial competitiveness and boost demand.