Indian industry sees green shoots of manufacturing growth

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SME Times News Bureau | 11 Aug, 2014
The Confederation of Indian Industry (CII) Sunday said green shoots have started to appear in the manufacturing sector, with a majority of segments likely to post higher output.

"After a prolonged period of declining growth and sluggish investment, the industrial activities seem to be picking up and green shoots in manufacturing sector are finally visible," CII said citing a study by the CII-Associations’ Council Meeting (Ascon).

The survey by CII-Ascon for the April-June quarter indicates positive growth in sectors like consumer durables including the vehicular and white goods industries, which recorded a growth of 5-10 percent, leading to improvement in the overall industry growth.

According to the survey, the number of sectors showing high and excellent growth (10 percent and above) have increased from 15 in last quarter in January-March 2014, to 24 in the quarter April-June 2014.

The survey categorises the growth range in four broad categories -- excellent (over 20 percent), good (10-20 percent), low (0-10 percent), and negative.

It found that sub-sectors such as tablets, LEDs and LCDs, smartphones have achieved phenomenal growth of over 20 percent. The passenger car segment also for the first time in the last two years has grown between 5 and 10 percent.

The good growth of automobile industry is driven by the excise duty cuts announced in the interim budget and its extension in the Budget 2014-15 presented by the new government. The excise duty stimulus also comes as a relief to the capital goods sector as well as the white goods segment.

However, core sectors continue to remain under stress lying in the low-growth category. The capital goods sector, too, has shown stability in its growth, which also improves the overall industry sentiment, the survey said.

The survey indicates the positive growth of industrial activity, which is a clear shift from the dismal industrial growth witnessed during the last quarter.