New Delhi: Expressing serious concerns on indifferent performance of industrial sector in January 2014, apex industry body ASSOCHAM said that estimates of industrial production for the month of January 2014 shows industrial stagnation as manufacturing industry continued to register deceleration along with significant continued fall in the production of capital goods and consumer durables too indicate that industrial sector has lost growth appetite.
“The negative growth of manufacturing has got serious implications for the overall growth, employment and trade balance,” said D.S. Rawat, secretary general of ASSOCHAM.
“The lack of depth in manufacturing has been affecting India’s economic security and stability as sustained high negative current account balances with China and other trade partners,” said Rawat. “In view of this, ASSOCHAM strongly recommends for a paradigm shift in the government approach as cheap imports of various manufactured goods like electronics, chemicals and steel are resulting in domestic manufacturers to lower capacity utilization rates, leave alone adding new capacities.”
“Various Government Ministries must act in unison for putting together effective policy measures for addressing this phenomenon. In the long term, the country needs to reform both policies and processes,” said Rawat. “The RBI needs to take a constructive view while undertaking the mid-quarter review of its credit policy later in the week. The weak supply response arising out of difficult business conditions needs the attention of policy makers.”