Industry buoyant, but wonders whether slowdown has begun

New Delhi, May 31 (UNI) Industry was today jubliant at the economy having clocked 9.4 per cent growth in fiscal 2006-07, but wondered whether the 9.1 per cent growth in Q1FY07 was reflective of a slowdown in the economy as a result of the hawkish policy of the RBI to check price rise.

The bullishness of the industry emanated from the fact that manufacturing grew by a robust 12.3 per cent and services maintained its vibrancy ending with a growth rate of 7.8 per cent.

The laggard continues to be the agricultural sector having registered a modest growth rate of 2.7 per cent in 06-07.

But the fact that a clear cut agricultural strategy has been drawn up at the recently concluded National Development Council meeting to catapult agri growth to four per cent per annum, generated hope among industry circles.

For only if agriculture does well, the waves of income generated in the rural areas will provide a market for industrial goods.

The 9.4 per cent growth rate registered in the last 18 years, far removed from the Hindu rate of growth witnessed in the 1980s, when the economy could not cross the hump of four to five per cent per annum.

No less heartening was the growth rate of Q1FY07 for even a 9.1 per cent growth is no mean acheivement. But the over hang of the tight money policy of the Central Bank did create a sense of passimism among the business community.

The famous Lord John Mynard Keynes while writing his treatise on 'The Great Depression' of 1930s had warned that it was easier to make businessmen pessimistic, but far more difficult to create a sense of optimism among them.

Lord Keyness thoughts are today reverberated once again among the Indian business community, not withstanding the fact that Finance Minister P Chidambaram gave a categorical assurance that the government will spare no effort to sustain a growth rate of nine per cent in the current fiscal.

CII said its own projection on the macro economic parameters came very close to the figures released by the CSO.

ASSOCHAM said the high growth would provide a cushion to the government to make the growth process more inclusive and devote its energy to eradicating the age-old problems of poverty, malnutrition, hunger and improving the deplorable state of the bleak human development indicators.

FICCI said the gains of growth need to be further consolidated and enjoined upon the government to manintain a condusive policy and investment climate.

India's economy today is the second fastest growing economy in the world, next only to China.

The CSO estimates beat the government's own projections of a 9.2 per cent growth in the last fiscal.

Industry rejoiced that it had come of age -- making large acquisitions overseas and accumulating high External Commercial Borowwings.

India was today a force in the comity of nations and Indian industry, a force to reckon with.

UNI