New Delhi: More sectors such as capital goods and consumer durables may have lower growth in January- March, indicating that economic slowdown is showing no signs of bottoming out, a CII-Ascon survey said Monday.
The number of sectors reporting low growth in January-March 2013 has increased significantly over the corresponding period of the last year suggesting that the slowdown has taken a firm grip on the economy, the survey said.
"The continued slowdown in industrial performance during the past several quarters is becoming a cause for concern and calls for steps to stimulate the economy," CII Director General Chandrajit Banerjee said.
No doubt, the recent initiatives taken by the government are noteworthy but the results are not visible yet, he added.
The survey said the biggest policy changing opportunity is the Union Budget and the government is fully seized of the criticality of the situation.
"We are hopeful that the budget would provide the necessary policy impetus to growth," it said.
The survey said a majority of sectors in the producer goods segment (basic, intermediate and capital goods sectors) are reported to fall in 'low' growth bracket during January-March 2013.
It said the major segments in the capital goods sector including earth moving and construction equipment, machine tools, textile machinery and commercial vehicles are expecting a low/negative growth during the period under review.
Similarly, in the consumer durables segment items like passenger cars, refrigerators and TV are among the prominent ones expecting 'low' to 'negative' growth performance in the current quarter, the survey said.
"The sluggish performance of both producer and consumer goods indicate subdued demand conditions in the economy which going forward does not bode well for revival of growth in the coming quarters as well," it said.
The survey said the respondents have raised concerns over the deteriorating macroeconomic conditions owing to multiple factors both domestic and global.
On the external front, the slow recovery of global economy has contributed to a weak economic environment. These concerns have been aggravated by domestic factors such as declining exports, high inflation, stalled investments and subdued consumption, among others, it said.
To revive the country's economic growth, the respondents said there is a need to restart the investment cycle, encourages PSUs to utilise their cash reserves to build new capacities, exempt infrastructure and SEZ companies from Minimum Alternate Tax and fast-track large industrial projects in the forthcoming Budget, it said.