Industrial Growth in August 2009

The performance of the industrial sector which has shown a resurgent performance-by registering a double digit growth of 10.4 per cent in August 2009 as compared to 1.3 per cent in August last year- is a source of optimism for industry. In fact the impressive numbers are backed by a strong performance of manufacturing, mining and electricity sectors. Such a rebound is a harbinger for better times ahead as it indicates a pick up in demand which is likely to gather momentum in the coming months. 

“What is heartening to note is the performance of the capital goods sector, which has recorded a sharp rise in growth to 8.3 per cent in August 2009 – up from 2.3 per cent in August 2008 and even a dismal 2 per cent in the previous month. Similarly, intermediate goods have recovered from the red to post a robust 14.3 per cent growth. This gives strong signals that fresh investment is picking up and industry is on the rebound. Consumer durables have also shown a 22.3 per cent growth indicating a rise in consumer demand spurred by a fall in interest rates and the positive sentiment provided by the stimulus package.” Said Mr. Krishan Kalra, Secretary General, PHD Chamber of Commerce.  .

 However, despite the above, it is also true that the economy and more particularly industry is not out of the woods. The impressive growth in industrial production has been achieved on a lower base of last year and needs to be watched for a sustained improvement in performance.  

“Against this backdrop it has become imperative to give a fillip to the industrial sector by providing an impetus to growth. Availability of raw materials and credit at reasonable rates is a priority to boost demand and reduce production costs in industry.  Besides, the government should continue with the stimulus package and broadly press ahead with the second round of reforms-infrastructure and skill development besides, reining in fiscal deficit. Moreover, the RBI should continue with the soft interest rate regime to spur growth in industry.” Added Mr Kalra.

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