D&B sees IIP growth at 2.5-3.5%

Industrial growth is expected to remain below 5 per cent for the next couple of quarters unless the pace of clearances for projects and input supplies improve and investment cycle picks up, says a report.

According to research firm Dun and Bradstreet, Index of Industrial Production (IIP) is likely to yield positive growth during the month of October this year partly due to low base and added that IIP growth is expected to remain in the range of 2.5-3.5 per cent during October.

Industrial output in September contracted by 0.4 per cent due to poor performance of the manufacturing sector and decline in consumer as well as capital goods output.

The industrial output growth rate turned negative in September after showing 2.3 per cent growth in the previous month. IIP was 2.5 per cent in corresponding month last year.

"While the contraction in external demand persists, the domestic demand also continues to moderate. These pose significant constraints to the industrial activity and revival of the investment scenario," Dun & Bradstreet India Senior Economist Arun Singh said.

The economic growth rate slipped to a nine-year low of 6.5 per cent in 2011-12. The Reserve Bank had projected 5.8 per cent growth rate for 201213.

Singh further noted that industrial production is likely to remain subdued in the near term and will gather pace depending upon how the government acts in terms of implementation of the announced measures coupled with initiating new ones.

"Appropriate and timely policy announcements and implementations at this stage are crucial to boost the overall sentiment and encourage the private sector participation. Clearances and fast tracking of infrastructure projects and ensuring a conducive business environment is vital for the revival of the industrial activity and hence the growth going ahead," Singh added.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on indianexpress.com are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, indianexpress.com reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.