Days of eight per cent growth nearing their end, says CII

The Confederation of Indian Industry (CII) has suggested a series of measures to revive economic growth in the light of slowing industrial production. The latest Index of Industrial Production (IIP) report has shown a 3.8 per cent growth for the month of May. CII has asked the government to remove hurdles in investment, improved access to capital, fast-track fiscal reforms such as quick introduction of GST and infrastructure building. Expressing concern over the slowdown in economic growth, the chamber in its statement said, “It seems that the period of robust 8 per cent plus growth of the last four years is coming to an end.”

The slowdown in industrial production seems to have spread across sectors — the most worrying being in the capital goods sector, which implies slower growth in investment demand, CII has said.

Growth in the capital goods sector had remained strong through last year, even with other sectors slowing down, keeping alive hopes of strong investment demand.

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The recent fall in the demand for capital goods has now indicated a slowdown in corporate plans for capacity expansion.

The chamber has, however, called for a renewed focus on the growth objective, while appreciating the RBI’s dilemma of having to balance objectives of robust growth and low inflation.

The Index of Industrial Production (IIP) growth is at its lowest since March 2002.