New Delhi: A majority of units in the manufacturing sector are expected to register low-to-negative growth in the October-December quarter because of high interest rates and increasing prices, a survey by lobby group Confederation of Indian Industry (CII) has said.

The CII-Ascon survey, which has tracked growth of about 110 sectors, said the percentage of sectors reporting low to negative growth has increased to 56.4% during the quarter from 48.6% in the same period last year.

Those sectors reporting negative growth also moved up from 17.1% to 20.8% in the same period, it said. The growth range is in four broad categories: excellent (more than 20%), good (10-20%), low (0-10%) and negative.

The expectation of a recovery in industrial performance has been belied against the backdrop of a slew of economic reforms announced by the government, it said.

The survey “has indicated greater percentage of sectors reporting low-to-negative growth in October-December quarter of current year over the corresponding period of last year".

It points to a continuation of the slowdown as the positive results of the recent reform measures announced are yet to take effect.

“A commensurate action is now required from the Reserve Bank of India (RBI) in the form of reduction in repo rate to ease the monetary situation. Industry is in need of a combination of fiscal, monetary and administrative measures," it said.

Industrial production contracted by 0.4% in September on account of dismal performance of manufacturing and capital goods sectors.

Sectors expecting low-to-negative growth include earth moving and construction equipment, machine tools, transformers, textile machinery, and tractors.

Besides, consumer durables such as passenger cars, two-wheelers, refrigerators, washing machines, air- conditioners, TV, are among the sectors expecting low-to-negative growth.

Further, at the disaggregated level, the producer goods sector (basic, intermediate and capital) may perform worse than the consumer goods (durables and non-durables) segment in October-December quarter of 2012-13.

“Consumer goods sector may witness similar deterioration in coming quarters with the fading away of the favourable impact of ongoing festival season on demand for consumer durables," it said.

Close
×
My Reads Logout