New Delhi, Apr 16 (UNI) The Standing Committee on Commerce today asked the government to identify the causes of decrease of growth rate of the manufacturing sector and take immediate corrective measures.
In its 86th report on the 'Demands for Grants', the Committee also asked the Department of Industrial Policy and Promotion to look into the reasons for the sharp or negative growth rate of two-digit level industry groups and take corrective measures, in coordination with the Ministeries concerned. In this context, 'Metal Product and parts' and 'Transport equipment and parts' should receive the Department's special attention, the Committee, headed by Mr Murli Manohar Joshi, said.
The Committee noted that industry has been one of the major drivers of growth of the Indian economy. After a period of low and indifferent growth since 2002-03, the manufacturing sector-- with an almost 80 per cent weight in the Index of Industrial Production (IIP)-- witnessed a revival and achieved a high growth of 12.5 per cent in 2006-07.
During April- December 2007, the manufacturing sector registered a relatively lower growth of 9.6 per cent.
A slowdown in consumer demand for some industries and a slackening of export demand in a few industries are among the possible contributors, the Committee said.
Further a rise in interest rates and a depreciation of the US dollar vis-a vis market-determined currencies such as the Euro, Pound, Yen and Rupee, could have contributed to a slackening of demand for goods in interest sensitive and exchage=-sensitive sectors.
The performance of the industrial sector measured in terms of the IIP had improved from 8.4 per cent in 2004-05 to 11.6 per cent in 2006-07.
During April- December 2007, the industrial sector posted a growth of nine per cent against 11.2 per cent in the corresponding period of the previous year.
During April- December 2007, the manufacturing sector recorded a growth rate of 9.6 per cent, as against 12.2 per cent in the corresponding period of the proceeding year.
During April- December 2007, mining and quarrying sector registered a growth rate of 4.9 per cent as against 4.4 per cent last year and the electricity sector grew at a lower rate of 6.6 per cent as against 7.5 per cent last year, the Commitee said.
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