Poor core growth confirms slowdown

Electricity, with a weightage of 10.17 per cent in the IIP, showed a sharp decline in September, this year, growing by just 1.9 per cent, against a high of 16.6 per cent in September 1999. In the first half of 2000-1999, the growth rate was 3.3 per cent, as compared to 7.5 per cent in April-September 1999.

The hydel sector continued to show negative growth rate, -2.8 per cent in the first half this fiscal, against -2 per cent in the corresponding period in 1999-2000. Last two months were particularly bad for this sector, with -18.2 per cent in August and -6.7 per cent in September. In September 1999, the sector grew by 9.8 per cent.

The thermal power sector’s performance, for the first half, also came down from an impressive 10 per cent, last fiscal, to 4.7 per cent in April-September, 2000.

Steel, with a weightage of 5.13 per cent in the IIP, declined slightly in the first half, with the rate going down from 13.7 per cent in H1 1999, to 12.1 per cent this fiscal. For the month of September, however, there was a marginal improvement, the rate was 16.5 per cent, up from 16.2 per cent in September 1999. Crude petroleum has 4.17 per cent weightage in the IIP, registered a negative growth of one per cent, in the first half of this fiscal. In the HI of 1999, the growth rate was one per cent.

Coal, with a weightage of 3.22 per cent in the IIP, was back in the black, registering 8.9 per cent in the first half, against -1.5 per cent in April-September 1999. In September, this year, the sector did very well, growing at a rate of 15.2 per cent, as compared to -0.5 per cent in September 1999.

Petroleum refinery and cement, with 2 per cent weightage each in the IIP, grew by 29.2 per cent and 3.2 per cent, in the first half. In the corresponding period last fiscal, the respective growth rates were 19 per cent and 18.9 per cent.

FICCI had recently outlined a five-point blueprint for the government to reverse the slowdown in the economy. The specific suggestions made by FICCI to Finance Minister Yashwant Sinha, as a follow-up to the meeting he had with apex industry bodies are immediate investment in infrastructure such as roads and ports by the government to stimulate demand based on Keynesian model, supply side intervention – involving incentives to entrepreneurs to supply, stimulate agro business which will augment rural demand, crack down on counterfeit products and evolve a regulatory mechanism to stop inflow of cheap and subsidised Chinese products.

Govt assures steps to bolster economic growthHNEW DELHI:The government today assured industry that it has taken up a series of measures to boost demand to overcome industrial sluggishness and said frequent meetings will be held with business houses for reviewing the progress. During a marathon meeting with the chief executives of the corporate India, Finance Secretary Piyush Mankad outlined 15 different action areas where government has moved to raise industrial and economic growth. The slew of measures included granting of insurance licences at the earliest, telecom liberalisation, encouraging entry of venture funds, subsidy cuts and tax reforms. The government had also initiated steps for further development of the country’s bourses, growth in the housing sector, development in the pharma and R&D Sector. The meeting attended by Maruti Udyog managing director Jagdish Khattar, Eicher group chairman S Sandilya, Triveni Engineering chairman and managing director Dhruv Sawhney and other prominent industry captains called for urgent measures to reverseindustrial slowdown.

Mankad said the regulatory authorities set up in power, telecom and other sectors would take up more functions in the future years. CII representatives informed the finance secretary that the infrastructure sector has the potential to galvanise the entire economy by creating demand and employment opportunities for the downstream sectors. The chamber suggested a nodal agency – National Infrastructure Development Board – on the lines of the FIPB to look into aspects of the infrastructure development and timely completion of projects. The government should clear some key projects which would act as a demonstration effect on the other projects and publish monthly reports of the five top projects as part of the accountability of the centre.