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Reacting to the latest figures on industrial production, apex industry chambers said the industrial performance is deeply disturbing.
The Index of Industrial Production growth for the month of June 2012 at -1.8 per cent clearly points to a deepening industrial slowdown.
The chambers have called for the immediate re-set of the policy matrix.
India can no longer pursue a policy of deferred decision-making if it has to bring back the growth momentum, said Rajkumar Dhoot, ASSOCHAM President.
He said the deep slide in the capital goods sector clearly reflects a secular drop in the investment levels in the economy. “A deep cut in interest is essential,” he added.
CII emphasised on revival measures such as reduction in repo rates, quick implementation of fiscal consolidation plan and fast tracking infrastructure project.
“FICCI’s latest manufacturing survey also shows that the growth in manufacturing is not likely to revive soon at least in July-September quarter. Since export demand is also weakening, there is a need for stimulating domestic economy by taking bold decisions on reforms in areas such as decontrolling diesel price, reducing fiscal deficit and encouraging foreign investments to bring back growth in manufacturing”, said R. V. Kanoria, FICCI President.
FICCI emphasised that there is a strong case for the RBI to cut interest rates further at least by 50 basis points immediately so as to encourage investments.
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