Mumbai: Describing the continuing economic gloom, as reflected in the IIP data, as worrisome, State Bank of India Chairman Pratip Chaudhuri on Wednesday said it is time policy makers "wake up" to take urgent corrective steps.
The chairman of the nation's largest bank stressed the need to give more attention to the industrial sector, saying all major economies in the world have grown on the back of their manufacturing prowess.
"This (the slowdown in growth) is very worrisome ... I think the industrial sector really needs attention and the IIP growth at 2 percent for April, (while) we have been expressing satisfaction that GDP growth is at 5 percent," he told the agency in an interview.
To a question on poor industrial growth in April, he said: "The industry component at 2 percent is a great matter of worry. Everybody, the policy makers, as also people in the field need to give it a thought ... The low IIP growth which has been happening for the past one year, its time we wake up to that," he added.
When asked if reports of green-shoots emerging on the growth front are belied by today's IIP readings, he said the latest numbers call for "a reality check" as just having an optimistic view will not serve the purpose of reviving growth.
"Optimism is always good, I would share the optimism. But from time to time, we should do a realty check, whether the optimism is correct."
He also said there is no reason to doubt the veracity of the IIP numbers given the fact that statistical techniques have evolved a lot in recent past.
Chaudhuri further said trade deficit is a large contributor to the high current account deficit and added that this means our exports have become uncompetitive in the global markets.
This is in spite of the recent depreciation of the rupee, which since May has lost almost 6 percent, which should otherwise incentivise exports and called for immediate steps like allowing 100 percent export credit refinance to boost exports.
"I think the government and the Reserve Bank need to give a signal that they are serious about supporting exporters," the SBI chief said.
The chairman further said that it is concrete action on the policy front and not commentary alone, which will help the economy pull itself out of the trough.
"More than policy statements, it is the signals and actual steps which go a long way (in propping up growth)," Chaudhuri said.
He said an emphasis on manufacturing, which has a greater multiplier effect for the economy, will also help the government as the tax revenues from manufacturing is more than the services sector, which constitutes over 60 percent of the GDP component, because the revenue from services like CST, Excise is relatively less.
Data released earlier today showed industrial production growth slipping to a poor 2 per cent in April on account of dismal performance in manufacturing, mining and power sectors coupled with lower output of capital goods.