Economic Survey says industrial growth has revived to 7.7 percent in 2009-10

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New Delhi, Feb.25 (ANI): The Economic Survey for 2009-10 presented by Finance Minister Pranab Mukherjee in Parliament on Thursday has revealed a recovery in the industrial sector as corroborated by both the data on national accounts and the index of industrial production (IIP).

The downward trend observed in the rate of growth of the IIP that spanned almost eight quarters (beginning the first quarter of 2007-08 and continuing through to the last quarter of 2008-09) stands reversed as gleaned from the latest data for the current fiscal.

After reaching a trough of 0.6% during the second half of 2008-09, growth in the IIP revived to a level of 7.7 percent during April-November 2009-10.

The broad-based nature of the recovery was evident in the pick-up in growth of almost all major components of the IIP. The major industrial groups like automobiles, rubber and plastic products, wool and silk textiles, wood products, chemicals and miscellaneous manufacturing staged a strong recovery during April-November 2009, while machinery and textile products reinforced their growth.

Led by cement, non-metallic mineral products also staged a modest recovery. roduct groups like paper, leather, food and jute textiles did not evince any visible recovery. Cotton textiles and metal products have also been experiencing lacklustre growth since 2007-08. Overall the picture is a mixed one in the analysis of major industrial group.

The strong growth in the machinery and equipment group fed into the growth in capital goods, while some automobile components like commercial vehicles exhibited slack in growth. Growth in consumer durables has been broad-based, the robust production performance of automobiles being quite significant. On the other hand, the low growth in food products, beverages and tobacco products and cloth and footwear acted as a dampener on the growth in consumer non-durables. The textile group consisting of cotton, wool, silk and man-made and jute textiles and textile products, grew by 7.5 percent during April-November 2009 compared to 1.0 percent during April-November 2008.

Overall, the production of textile fabrics increased by 10.7 percent during April-November 2009-10.

The highest growth was observed in the hosiery sector (12.8 percent) followed by power looms (12.5 percent).

The technology upgradation fund scheme (TUFS) and scheme for integrated textile parks (SITP) are two flagship schemes of the Ministry of Textiles. Under TUFS, Rs. 78,307 crore was sanctioned against the project cost of Rs. 1,79,856 crores and loans worth Rs. 66,284 crore were disbursed to 25,777 applicants upto June 2009. Under the SITP, 40 integrated textiles parks of International standards, covering the weaving, knitting, processing and garmenting sectors with project proposals worth Rs. 4,141.39 crore (of which assistance from the Government is Rs. 1,422.43 crore), have been sanctioned.

Wood and wood products showed 10.5% growth in production during April-November 2009, compared to 6% decline during the same period in the previous year. Paper and paper products grew by 2.1 percent while paper and paper board and corrugated boxes/cartons achieved reasonable growth during the current year, bleached newsprint and rayon-grade pulp declined by more than 10 percent.

The leather products which include finished leather, leather footwear, shoe uppers, leather garments and other leather goods, showed only 0.9 percent growth in production during April-November 2009, following a 5 percent decline during the same period in the previous year. Finished leather declined by 13 percent causing much of the slow down in the sector during April-November 2009. While footwear items showed a mixed picture, leather garments grew by 5.7 percent during the period.

The Indian pharmaceutical industry has grown from Rs. 1500 crore in 1980 to approximately Rs. 1,00,611 crore in 2009-10 (September 2009). The country now ranks 3rd in terms of volume of production (10 percent of global share) and 14th by value.

The Indian pharma industry growth has been fuelled by exports which registered a growth of 25 percent in 2008-09. Registering the impact of the global meltdown, the production of petro-chemicals declined by 5.5 percent in 2008-09 but recorded a positive growth of 0.76 percent during April-December 2009. Rubber and plastic products grew by 25 percent during April-November 2009. The non-metallic mineral products grew by 6.4 percent during April-November 2009 as against negligible growth during the corresponding period in the previous year.

India ranked as the 5th largest producer of crude steel in the world during January-November 2009. The Indian Steel Industry appears to have successfully overcome the effects of the global economic slowdown during 2009-10.

India and China are the only countries to have registered a positive growth during January-November 2009. The strong growth in the GDP in the 2nd quarter of the current fiscal and in the IIP during April-November 2009 suggests that the demand side of the steel industry is back on stable footing. Indian steel outlook for 2010 continues to be positive, since Indian steel consumption is expected to be rising at 6-9 percent during the current year.

The global financial crisis affected growth in tourism in 2008-2009. Government made concerted efforts including a series of promotional initiatives to counter the impact of the slowdown. ANI)

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