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Seventeen sectors recorded negative growth, says survey

NEW DELHI: Rebutting the claim of the government on economic growth, the Confederation of Indian Industry (CII) has said that 17 sectors have recorded negative growth in the first half of the current fiscal.

It voiced concern that more than 50 per cent of the manufacturing sector has recorded either moderate or negative growth.

CII Industry Council Chairman Satish Kaura, releasing the ASCON survey report, said on Sunday that the government had claimed that only one of the 17 industry groups (based on the two-digit NIC classification) recorded negative growth in April-August 2007. But the survey has revealed that 17 out of 91 sectors showed negative performance during the first half of the year (April-September).

The survey attributed the low growth in the manufacturing segments to rising interest rates, reduced credit availability and a strong rupee.

It also said the Free Trade Agreements (FTAs) signed by the government with some of the countries in the last two years too had affected the manufacturing sector’s performance. “Automobile industry, including motorcycles and three-wheelers, are among the sectors in the negative sales growth category.”

Cement, energy meter, ball and roller bearing, polymer, utility vehicles, refrigerators, rubber footwear, bus and truck tyre have shown moderate growth. However, fertilizer, machine tools, capacitors, motorcycles, and edible oil are in the negative growth category.

The official Index of Industrial Production (IIP), however, had reported that only metal products and parts (except machinery and equipment) showed negative growth during April-August 2007.

According to the survey, of the 91 sectors, 15 reported excellent growth rate of more than 20 per cent, 22 recorded high growth rate of 10-20 per cent, 37 posted moderate growth rate of less than 10 per cent and 17 reported negative growth.

The percentage of sectors in excellent and high growth category declined, while that for the moderate and negative category increased over between April 2007 and June 2007.

Scooters, mopeds, electric fans, sponge iron, circuit breakers and transformers were in the excellent growth category, while those in the high growth segment included asbestos, cement, pig iron, power cables, industrial valves, textile machinery, transmission line towers, air conditioners and microwave ovens.

On the exports front, the survey said five sectors had shown excellent growth, five sectors registered high growth, eight sectors posted moderate growth and five sectors registered a fall in exports. Export of cement, ceramics, mopeds and rubber goods fell during the first six months of the current fiscal, it added.

Machine tools, air-conditioners and motorcycles registered excellent growth performance, while those in the high growth category included vehicles, three-wheelers, industrial valves and cold rolled steel, the survey said.

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