While stating that Indias industrial sector is expected to rebound during the next financial year,the Economic Survey said the country needs to shore up business sentiments,spur investment in production,identify and remove bottlenecks and focus on increasing the contribution of manufacturing to the GDP.
With the easing of headline inflation,moderation in commodities prices in the international market,and revival of manufacturing performance in recent months in major economies,Indias industrial sector is expected to rebound during the next financial year,the survey 2011-12 said.
The growth of industrial sector during 2011-12 is pegged between 4 and 5 per cent,less than the annual growth rates achieved in the recent. During April-January 2011-12,industrial production or Index of Industrial Production stood at 4 per cent year-on-year. The main reason for concern has been the contraction witnessed by the intermediary goods and capital goods.
Since the beginning of January 2011,there has been a moderation in the rate of growth of credit mainly in infrastructure and manufacturing sectors. On year-to-year basis,credit growth to industry decelerated to 19.8 per cent in December,2011 from 31.6 per cent in December,2010.
To increase the share of manufacturing to 25 per cent in the GDP,as per the National Manufacturing Policy (NMP),the government will have to take specific steps like resolving land availability issues and focussing on high value-added industries apart from meeting the investment requirement.
The NMP envisages increasing contribution of manufacturing to the national GDP and creating 100 million jobs in the next decade. The growth of the services sector depends considerably on the growth of manufacturing,the survey said,adding that banking,insurance are some of the areas where growth will be driven by manufacturing sector.