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The real GDP growth figure for the second quarter at 6.9 per cent is only an official vindication of the weakness already apparent in the industrial sectors, said the Confederation of Indian Industry on Wednesday. “Even this growth rate has been achieved by significant downward revision in GDP growth rate of second quarter of 2010-11 from the earlier 8.9 per cent to 8.4 per cent,” said Dr Rajiv Kumar, Secretary-General, Federation of Indian Chambers of Commerce (FICCI).
FICCI's analysis shows that the current growth rate would have been lower at 6.4 per cent without this revision. Thus, the impact of monetary tightening is evident 2010-11 onward.
“If the current trends are any indication, FICCI estimates that the GDP growth in the current fiscal will now be in the range of 7-7.1 per cent with significant downside risks,” Dr Kumar added.
PHD Chamber of Commerce and Industry (PHDCCI) asked for curtailing further monetary tightening, easing supply-side constraints, financing infrastructure expenditure, simplifying the tax structure, improving social-sector outcomes and achieving fiscal consolidation.
“The industry sector has been exhibiting a disappointing performance mainly driven by the slack in manufacturing and mining activities. The major impediment has been the spiral in its input costs, including high borrowing costs, shooting energy costs and flaring up of manpower costs,” said Dr S.P. Sharma, Chief Economist, PHDCCI.
The Associated Chambers of Commerce and Industry of India asked for fast-tracking the National Manufacturing Policy and cutting interest rates to attract investments.
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