The bright colours of crackers are going to be brighter this Diwali. Owing to the rise in the country’s fastest industrial output in the past 22 months, India Inc can be buoyant this festive season. There has been an increasing demand for cars, television and other goods due to which industrial output rose to 10.4% in August of the current financial year, which was just 1.3% during the corresponding of the last financial year. The manufacturing sector registered 10.2% growth in August 2009, as compared to August 2008. During the same period, mining and power generation segments recorded 12.9% and 10.6% growth, respectively. The sales of consumer durables also rose to 22.3% in September this year. According to economists, this high growth is due to increase in manufacturing activities, which weighs 80% in the index of industrial production (IIP). Govt reforms to revive economy Indian exports suffered heavily for several months during 2008-09 and partly in the current financial year due to the global financial crisis. As several countries in the West were adversely affected by the economic downturn, Indian exporters witnessed a huge slump in product demand. However, various economic reforms undertaken by Government of Mahendra Singh, Proprietor of Bhambra Engineering Works, a mid-sized machinery unit in Kolkata, says, “The high industrial output is due to the efforts on the part of GoI, which constantly introduced economic reforms when the country was plunging into financial crisis.” It is to be noted that the Indian manufacturing industry has gone through a lean phase in the past few months as recessionary pressures made investors hesitant to invest money and compelled customers to put their purchases on hold, which resulted in low industrial output. A reduction in tax worth Rs 40,000 crore has played a pivotal role in reviving the economy. The growth in industrial output will encourage the government to introduce more such stimulus packages. Arup Choudhury |
