The January IIP (Index of Industrial Production) numbers released show that the decline in industrial growth has not been as sharp as it had earlier been expected. With the decline in IIP contained within 1.0 per cent in both December and January, industry is likely to manage decent growth of 3.0 per cent during the year 2008-09. This would be commendable given the adverse global situation faced by industry over the past few months.
Data from sectors such as automobiles indicate that some turnaround will be visible in February. CII expects most sectors to do better during the current quarter compared to the previous quarter. "It is apparent that the measures taken by the Government and the RBI are slowly beginning to work", said Chandrajit Banerjee, Director General, CII.
The January data shows that while the performance of intermediate and basic goods has been disappointing, there has been an encouraging turnaround in the capital goods and consumer goods sectors. "India's strength lies in the importance of domestic demand in driving growth", said Banerjee.
Most reports indicate that demand from the rural sector remains strong as the rabi crop is expected to perform well. This will help offset the weakness in exports, which are expected to remain subdued on account of the global recession.
Source: CIIÂ
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