New Delhi, Aug 9 – There are signs of a recovery in the economy, albeit a slow one, the Confederation of Indian Industry (CII) said on Sunday.
What is especially significant is that there are fewer sectors anticipating negative growth, CII Associations’ Council (ASCON) chairman Naushad Forbes said in a statement here, releasing a survey on the issue.
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, Forbes said.
The survey by ASCON for the April-June first quarter, based on responses collected from sectoral industry associations, reveals a slight improvement in growth trends in production over the corresponding period a year ago.
Of the 93 sectors polled, 16.1 percent recorded excellent growth of more than 20 percent during the quarter in question as compared to 7.1 percent in the year-ago period.
However, the share of sectors that saw high growth rates of between 10 to 20 percent has reduced significantly to 9.7 percent in the April-June quarter from 14.3 percent during the same period of the previous fiscal.
The survey tracked the estimated growth trends in terms of production, sales and exports.
Responses were classed under four broad categories — excellent (growth in excess of 20 percent), high (growth in the range of 10-20 percent), moderate (0-10 percent) and negative (below zero).
The share of sectors reporting moderate growth declined marginally to 51.7 percent during the quarter as compared to 51.8 percent in the period a year ago.
Further, the number of sectors recording negative growth has fallen from 26.9 percent in the first quarter last year to 23.6 percent this year.
On the other hand, the survey’s respondents cited industrial relations, transport infrastructure bottlenecks and the cost and availability of finance as moderately important factors impeding growth.
On the issues 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 percent of the respondents, the CII said.
However, a sustainable recovery would be conditional on improvement in domestic demand and investment revival, it added.