A majority of units in the manufacturing sector are expected to register low to negative growth in the October-December quarter mainly due to high interest rates and increasing prices, a CII survey has said.
New Delhi: A majority of units in the manufacturing sector are expected to register low to negative growth in the October-December quarter mainly due to high interest rates and increasing prices, a CII survey has said.
The CII-Ascon survey, which has tracked growth of about 110 sectors, said the percentage of sectors reporting 'low' to 'negative' growth has increased to 56.4 per cent during the quarter from 48.6 per cent in the corresponding period last year.
Those sectors reporting negative growth also moved up from 17.1 per cent to 20.8 per cent during the same period, it said.
The expectation of a recovery in industrial performance has been belied against the backdrop of a slew of economic reforms announced by the government, it added.
The survey "has indicated greater percentage of sectors reporting low to negative growth in October-December quarter of current year over the corresponding period of last year".
It points to a continuation of the slowdown as the positive results of the recent reform measures announced are yet to take effect.
"A commensurate action is now required from the RBI in the form of reduction in repo rate to ease the monetary situation. Industry is in need of a combination of fiscal, monetary and administrative measures," it said.
Industrial production contracted by 0.4 per cent in September on account of dismal performance of manufacturing and capital goods sectors.
Sectors expecting low to negative growth include earth moving & construction equipment, machine tools, transformers, textile machinery, and tractors.
Besides, consumer durables like passenger cars, two wheelers, refrigerators, washing machines, air conditioners, TV, are among the sectors expecting low to negative growth.
Further, at the disaggregated level, the producer goods sector (basic, intermediate and capital) may perform worse than the consumer goods (durables and non-durables) segment in October-December quarter of 2012-13.
"Consumer goods sector may witness similar deterioration in coming quarters with the fading away of the favourable impact of ongoing festival season on demand for consumer durables," it added.
The growth range is in four broad categories: excellent (more than 20 per cent), good (10-20 per cent), low (0-10 per cent) and negative.