Economic ills continue: CSO

NEW DELHI, Sept 12: The first four months of the current fiscal 1998-99 witnessed deepening of the recession with most of the important s...

NEW DELHI, Sept 12: The first four months of the current fiscal 1998-99 witnessed deepening of the recession with most of the important sectors showing negative or decelerated performance. The economic gloom, witnessed in fall in the performance of the manufacturing sector, was all pervasive may it be capital goods or consumer goods.

A detailed analysis of the index of industrial production IIP released by the Central Statistical Organisation CSO reveals that economic deterioration continued unabated in the current fiscal beginning April. Whatever may be the reasons, political, economic or fallout of the East Asian crisis, there is an urgent need to take steps to arrest the economic slowdown.

The biggest casualty in the current fiscal is the manufacturing sector with a weightage of 793.58 in the 1000 point index of industrial production. The fiscal 1998-99 has witnessed almost steady decline with the index continuing its slide. The index for the manufacturing sector which stood at 141.3 at the endApril, slightly moved up to 142.3 in May to slid to 139.1 in June and dropped further to 137.8 at the end of July.

What is worst is that the first four months of the 1997-98 were not as bad as in the current year. In the last fiscal, which too was bad, the index for the manufacturing sector firmed up from 134.7 at the end of April to 136.2 at the end of July 1997. Although the four months are not indicative, the gradual fall of the performance of the manufacturing sector month after month is ominous.

Although, on a month to month basis the capital goods industry seems to be doing well, the growth being 10.5 per cent during April-July as compared to the corresponding period last fiscal, that is only half the story. What is significant is that the capital goods sector has performed poorly in the current fiscal as revealed by the index.

The performance of the capital goods sector, as recorded by the index at the end of April was 131.1. The index firmed up to 134.4 at the end of May, only to slid to 133.0in June to drop sharply to 126.6 in July. Things were not so bad in the last fiscal when the capital goods sector continued to move up gradually with some exceptions. The sector, which witnessed a similar story in the current fiscal was the consumer goods sector.

The down trend in this sector was nearly the same as during the first four months of the last financial year. The index for the consumer goods sector continued to slid from 142.7 at the end of April to 128.7 at the end of July. The fall has been continuous as was seen in 1997-98.

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The consumer goods sector, has been specifically, pulled down by the consumer non-durables which has continued to perform very poorly. The decline in the case has been quite steep with the index sliding from 140.3 at the end of April to 123.1 at the end of July. The only sectors which have not done as badly as others in the first four months of the current fiscal are the basic goods and intermediate goods and the mining sector.