The economy is showing signs of a turnaround, albeit moderately, on the back of continued policy actions, implementation and enhanced business and consumer confidence, says a CII ASCON survey that tracks the growth of industrial and services sectors.
The poll by CII Associations’ Council (ASCON) for the April June quarter, based on responses collected from sectoral industry associations, reveals a slight improvement in growth trends in production over the year-ago period.
CII ASCON chairman Naushad Forbes said the recent trend of slow but continuous progress in industrial growth is noteworthy.
The survey’s respondents have expressed their optimism in a further improvement in the near-term growth outlook helped by continued policy actions, implementation and enhanced business and consumer confidence.
“What is especially significant is that there are fewer sectors anticipating negative growth and there has been a significant and perceptible positive movement in percentage points recorded by many of the sectors which were in moderate and negative growth category a year ago,” he said.
The industry associations which participated in the poll encompass wide range of sectors comprising of small, medium and large enterprises.
In most of the cases, these account for approximately 70% of the total industry output in respective sectors.
The survey tracked the estimated growth trends in terms of production, sales and exports for the April-June quarter.
Responses were segregated in four broad categories – Excellent (growth in excess of 20%); High (growth in the range of 10-20%); Moderate (0-10%) and Negative (less than 0%).
Of the 93 sectors surveyed, 16.1% recorded excellent growth of more than 20% during the first quarter of the current fiscal as compared to 7.1% in the year-ago period.
However, the share of sectors that witnessed a high growth rate of 10 to 20% has reduced significantly to 9.7% in the April-June quarter from 14.3% during the year-ago period.
Besides, the share of sectors reporting moderate growth has declined marginally to 51.7% as compared to 51.8% in the year-ago period.
Moreover, the number of sectors recording negative growth has fallen from 26.9% in the first quarter last year to 23.6% this year.
Among the issues and concerns impacting growth, margin pressure from stiff competition, competition from imports, shortage of power, high regulatory burden, lack of domestic and export demand, shortage of skilled labour and talent and high tax burden have been cited as the most important constraints by more than 50% of the respondents.
Besides, industrial relations, transport infrastructure bottlenecks, cost and availability of finance have been quoted as moderately important factors impeding growth.