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Business News/ Politics / Policy/  Economic Survey 2017: Industrial growth seen slowing to 5.2% in FY17
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Economic Survey 2017: Industrial growth seen slowing to 5.2% in FY17

Economic Survey 2017 says the pace of economic activity can be affected by demonetisation and the response to the gradual re-monetization

Chief economic adviser Arvind Subramanian says the NDA government has been focusing on schemes such as ‘Make in India,’ ‘Invest India’ and ‘Startup India’ to boost job creation. Photo: Hindustan TimesPremium
Chief economic adviser Arvind Subramanian says the NDA government has been focusing on schemes such as ‘Make in India,’ ‘Invest India’ and ‘Startup India’ to boost job creation. Photo: Hindustan Times

Mumbai/New Delhi: The Economic Survey 2017 projected on Tuesday a decline in the industrial sector’s growth to 5.2% in the current fiscal year from 7.4% in the last.

The sector comprises job-creating industries such as mining, manufacturing, electricity and construction. demonetisation. Last year’s railway budget had projected a rise of 50 million tonnes in the national carrier’s freight traffic.

The demonetisation drive set in motion by the centre on 8 November had its overhang on the survey. “In the last quarter of the current year, the pace of economic activity can be affected by the demonetisation of high-domination currency and the response to the gradual re-monetization," stated the survey, prepared by chief economic adviser Arvind Subramanian and his team in the finance ministry.

ALSO READ | Economic Survey 2017 identifies apparel, leather sectors to drive jobs growth

“For 2017-18, it is expected that the growth would return to normal as the new currency notes in required quantities come back into circulation and as follow-up actions to demonetisation are taken," it added.

The National Democratic Alliance government has been focusing on schemes such as ‘Make in India,’ ‘Invest India’ and ‘Startup India’ to boost job creation. “There is a job challenge and the question is what should be the response to those challenges," Subramanian said at a press conference on Tuesday.

Jaijeet Bhattacharya, partner, infrastructure, at consulting firm KPMG, said overall the economic survey stressed two themes—one, the creation of a more robust safety net like a universal basic income and, second, helping revive private sector investments.

ALSO READ | Universal Basic Income ideal to tackle poverty, says Economic Survey 2017

“From an infrastructure perspective, once the private sector starts pumping money, then a significant part of it should be going to the infrastructure sector," Bhattacharya said.

The survey said production of refinery products, fertilizer, steel, electricity and cement increased substantially, while the production of crude oil and natural gas fell during April-November. Coal production growth slowed in the same period.

Monthly coal production, which had fallen during August-October, rebounded in November with a 5.3% rise over the year-ago period and a 4% rise in December due to cyclical winter demand.

ALSO READ | Economic Survey 2017 says economy to bounce back from demonetisation

The eight core infrastructure-supportive industries such as coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity registered cumulative growth of 4.9% during April-November compared to 2.5% in the year-ago period.

The Index of Industrial Production (IIP) rose 0.4% in April-November. “This was the composite effect of strong growth in electricity generation and moderation in mining and manufacturing," the survey said.

The growth in electricity generation came on the back of thermal power, which grew by 6.9% during the April-September period. Of India’s installed electricity generation capacity of 310,005 megawatts (MW), 61% (188,968 MW) is coal-powered.

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Published: 31 Jan 2017, 06:22 PM IST
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