New Delhi: India will have to wait till the third quarter of this fiscal to witness the rebound in manufacturing, triggered by low-end consumer durables growth in semi-urban areas, says research firm Deloitte.
“The upswing in manufacturing activity still has to be some months after the new government is formed, that is by the third quarter of this fiscal, because a lot of policies and stimulus packages will have to find serious implementation,” Deloitte India senior director Kumar Kandaswami told PTI.
It is demand from the semi-urban and rural economies, mostly for brown goods and low-end consumer durables, that will boost manufacturing activity in some sectors, he said.
Manufacturing production, which constitutes around 80% in the Index of Industrial Production, declined 1.4% in February compared to 9.6% growth a year ago.
In major categories, only capital goods posted positive growth, while all other segments like consumer goods, intermediate goods and basic goods production contracted.
Within consumer goods, durables registered a 5.7% growth, while non-durables contracted by 5.5%.
In terms of industries, as many as nine out of 17 have shown negative growth in their output in February year-on-year.
Some industries showed a substantial decline, like metal goods production plunging by 31.3%, food products by 28.1%, wood and wood products by 16.5%.
However, six key infrastructure industries, which include finished steel, petroleum refinery products, crude oil, cement and electricity and, posted a growth of 2.9% in March, raising expectations that the economy may be reviving.
When asked whether this could be seen as early signs of revival, Kandaswami said data for a few more months have to be watched to confirm that revival is on the way.
“It could be very early signs of revival, but we need to see for two-three months more for any trend lines. If we are able to see the momentum in May-June then we would know for fact that there is some sort of revival,” Kandaswami said.