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Pondy set for growth in auto sector this fiscal

Written by: Staff

Pondicherry, May 10: With Chennai becoming a major automotive manufacturing hub, Pondicherry is now all set to emerge as an auto ancillary sourcing base for south India.

According to a business outlook survey by the Confederation of Indian Industry (CII) southern region, the production and sale of auto component units in the Union Territory had registered a 10 to 15 per cent growth in the period October 2005 to March 2006.

A CII press release here today stated that during the same period, the tourism industry, which is one among the top five industries of Pondicherry, registered an increase in tourist inflow, besides revenue of about 10 to 20 per cent. There was also a 10 to 15 per cent rise in sales for the chemical industry.

The key sectors in Pondicherry, which stood at an impressive Rs 6457 crore in 2004-05 as per their contributions to Gross State Domestic Product (GSDP) were automotive and auto-components, information technology, food processing, chemicals and tourism.

Among these, the first was expected to attract fresh investments and business orders from larger units in neighbouring states. The growth occurred both in production and sales.

The outlook for the industry was promising in these terms for April to September 2006 too, and was expected to grow at a similar rate. Export was also expected to go up by ten per cent.

The CII study said the industry faced challenges in terms of availability of skilled manpower, scarcity of raw materials and insufficient power supply. The release added that the Union Territory suffered huge loss as Pondicherry was yet to implement VAT. Industries too had asked the government to remove fringe benefit and service taxes on the sector.

In the background of a boom phase for the chemical industry at the national level, it had been a significant performance by the sector during the last half of the fiscal 2005-06.

Regarding industry parameters, production rose by five to 10 per cent and sales by 10 to 15 per cent. Ten per cent rise in capacity utilisation and 20 per cent decrease in inventory level reflected the present demand boom as well as a promising future for the sector.

Pondicherry's IT hardware industry produced 60 per cent of the country's total hardware. During October 2005 to March 2006, the revenue and overseas billing of the IT industry experienced a moderate growth of five to ten per cent. The IT industry was expected to fare marginaly better from April to September 2006.

The study said the industry was badly affected by the frequent changes in government policies.


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