Anand Sharma calls India Inc for talks to stem factory output slide

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Need of the hour: Anand Sharma, Minister for Commerce, Industry, in the Capital on Friday. — Kamal Narang
Need of the hour: Anand Sharma, Minister for Commerce, Industry, in the Capital on Friday. — Kamal Narang

Concerned over the fall in industrial output, Commerce and Industry Minister Anand Sharma will meet India Inc next week to seek suggestions on remedial measures.

Official data on Thursday showed that the June industrial production shrank 1.8 per cent against 9.5 per cent growth in the same month last year. This is the third time in four months that factory output is dipping.

Industrial output

Industrial output during April-June 2012 also declined by 0.1 per cent against 6.9 per cent growth in the same quarter last year.

An official statement on Friday said that Anand Sharma will first meet industry chambers, such as FICCI and CII, along with the apex body for exporters, the Federation of Indian Export Organisations.

He would then convene a meeting of the Government-Industry Task Force to get inputs for possible policy measures to boost factory output and exports. The Task Force was set up in July last year.

On Thursday, Anand Sharma met Finance Minister P. Chidambaram to discuss the fall in exports and industrial output among other things.

Terming the fall in industrial production as ‘disappointing’, Chidambaram had said on Thursday that it was important to focus on critical sectors, remove bottlenecks and give a fillip to production. He said the production would revive if there were new investments.

He said contraction in factory output was due to a decline in the manufacturing sector (-3.2 per cent in June and -0.7 per cent in the April-June quarter), adding that within this sector, capital goods fell -27.9 per cent in June, while consumer non-durables declined -1 per cent in the month. However, a positive is that consumer spending “remains good”, he added.

Export growth

Anand Sharma said he hoped that export growth would revive by autumn due to the measures taken by the Government.

Merchandise exports in June shrank 5.45 per cent year-on-year to $25.06 billion.

The fall — the third in four months since March — was largely due to weak demand in traditional markets such as Europe and the US, as well as the deceleration in domestic manufacturing.

(This article was published in the Business Line print edition dated August 11, 2012)
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