New Delhi: The manufacturing sector, which accounts for around 80 per cent of the industrial production, is likely to see a reasonable growth in the second quarter of the fiscal even as high interest rates and declining exports would continue to impact it, a survey said.
Eight out of the 10 segments of the sector would report not only positive but also high growth for the July-September 2009 period over the same quarter last year, the survey by industry body FICCI said.
However, "...the growth in our manufacturing sector
would continue to be restrained by exports in July-September
2009," the survey based on responses from 250 firms in 10
sectors, including textiles, metal, chemicals, tyre and
electronics, said.
Respondents from five sectors -- textiles, metal and
metal products, tyres, chemicals and miscellaneous -- expect
their exports would continue to fall in the second quarter.
FICCI further said that besides exports another factor
that would impact growth of the manufacturing sector is the
rate of interest and difficulties in procuring credit by small
and medium enterprises.
It said that credit is still provided at interest rates
as high as 16 per cent making the Indian manufacturers
uncompetitive globally.
"Banks are reluctant to lend to SME manufacturers as many
of them had earned losses in the previous year and hence banks
are insisting on credit ratings for these borrowers," the
FICCI survey said.
The survey said the sectors that are expected to witness
high growth are metal and metal products, machinery and
equipment, automotive, chemicals, leather, electronics and
miscellaneous industry.
Bureau Report
First Published: Tuesday, July 21, 2009, 18:04