Indian Economy India's Economy Stumbles – Now FICCI Issues Calls for Governmental Help
With a weak industrial output and a 6% fall in manufacturing and 7.2% in mining, the Indian economy will most certainly not achieve its goals for 2012, industry experts fear. Now the Indian apex business organisation FICCI expressed an urgent call for help towards the policy makers.
New Delhi/India – India's apex business organisation FICCI expresses its concerns about the state of the Indian economy: “The growth in manufacturing and mining remains an area of concern. The growth in manufacturing is indeed subdued and with continuous negative growth of capital goods we are not looking at any uptrend in manufacturing sector in coming months,” said FICCI president R. V. Kanoria, commenting on the recent Index of Industrial Production (IIP) for Decmeber 2011.
FICCI Calls Upon the Policy Makers
The association regards the rising raw material and fuel costs and high interest expenses as a main risk for manufacturing companies, speakers explained. Operation costs were also affected by forex losses, FICCI explained.
“The coming budget should not look at any increase in the excise duty for the manufacturing sector and Government should retain the current levels of duty. Also, RBI should bring down the interest rates,” Kanoria said. “A continuous negative growth in mining is certainly going to impact the sectors like basic metals and electricity which will further pull down the growth of industry.
YOY–IIP Drops by More than 5 Percent From November
In December, the Indian IIP reported a weak 1.8 percent year on year growth in December 2011 – November figures still indicated a solid 5.6 percent. Especially the Indian mining industry performed poorly: During the April–December period of 2011-12, the sector witnessed a -2.7 percent drop. Now analysts expect that India's GDP growth in the fiscal 2011-12 could be less than 7 percent, much lower than the 8.4 percent achieved in last fiscal and 7.5 percent projected earlier.