CII-ASCON SURVEY EXUDES ECONOMIC CONFIDENCE
The Indian manufacturing
sector is optimistic of
maintaining buoyant levels
of growth in the next
two quarters i.e. July-September
2010 and October-December
2010 though there may be a
slight drop in growth rates in the
second quarter, according to
CII's latest ASCON survey.
"Even though the recent hike
in policy rates by RBI may have
an impact on industry's growth
trajectory, business sentiment
remains positive and industry
members expect the growth
momentum to remain strong in
the next two quarters" said
Chandrajit Banerjee, Director
General, CII.
The CII-ASCON survey is
based on interactions with more
than 350 respondents from various
manufacturing industry
associations representing about
4,000 manufacturing companies.
The survey covers a wide
spectrum of sectors including
basic goods, intermediate
goods, capital goods, consumer
durables and non-durables.
Out of 110 sectors covered by
the survey, 27 sectors are expected
to register excellent growth
rate of more than 20 per cent, 30
sectors are expected to record
high growth rate of 10-20 per
cent, 42 sectors are expected to
record moderate growth rate of 0
to 10 per cent while 11 sectors
are expected to be in the negative
zone in the quarter July-
September 2010.
The quarter October-December
2010 is expected to be better than
the July-September 2010 quarter
in terms of more sectors recording
excellent and high growth
rates. Out of 110 sectors, 32 sectors
are expected to record excellent
growth, 40 sectors are
expected to record high growth.
Consequently, the number of sectors
recording moderate and negative
growth is expected to
decline to 32 and 6, respectively.
Sectors that are expecting to
grow at an excellent rate include
automotive, electronics and consumer
durables, and ball and
roller bearings and forgings.
Other sectors like tractors, electric
fans and machine tools are
also expected to perform fairly
well in the next two quarters.
The CII-ASCON survey also
highlighted some of the issues
faced by the industry. Amongst
the major demands of Indian
manufacturing sector is the early
implementation of GST which
would help improve competitiveness,
retaining the present levels
of Cenvat and excise rates, corrections
in inverted duty structures
and simplification of taxation
procedures and laws. Rise in
the cost of raw material, infrastructure
bottlenecks, threat of
Chinese imports and inadequate
credit supply are other major
concerns which need to be
addressed by the government to
enable industry to maintain
higher growth momentum.