High growth in mfg sector during April-Dec: survey

Top Stories

»	49% Indian startups now from tier 2, 3 cities: Jitendra Singh
»	'India ranks 3rd in global startup ecosystem & number of unicorns'
»	Tripura exported over 9K tonnes of pineapples in 2 years
»	CPI inflation eases to 6.71% in July, IIP falls to 12.3%
»	Rupee depreciates 12 paise to close at 79.64 against US dollar

SME Times News Bureau | 27 Dec, 2010
The performance of the the manufacturing sector confirms improvement during April-December 2010 compared to the corresponding period of the previous year, according to the latest CII ASCON survey.

The survey was released in the second CII ASCON meeting, held recently in Mumbai. According to the survey, as many as 50 segments in the manufacturing sector have shown 'excellent growth' of 39 percent in the first nine months of the current fiscal.

Out of 127 sectors covered by the CII ASCON survey, 50 sectors (39.3%) experienced excellent growth rate of more than 20% in April- December 2010 compared to 29 sectors (22.9%) in April-December 2009 which shows a marked improvement.

The sectors registering high growth rate have decreased from 27 (21.2 %) in April-December 2009 to 22 sectors (17.3%) in April-December 2010. This is because more sectors have shifted to excellent growth bracket.

Sectors showing over 20 percent growth fall under the excellent category, while those showing 10-20 percent expansion are considered ‘high’ performance category.

Reacting to the Survey, Chandrajit Banerjee, Director General, CII said, "While an increasing number of sectors are showing excellent growth, many sectors remain in the moderate growth zone including some core sectors such as cement and steel."

However, respondents to the survey also highlighted some of the issues being faced by their sectors. These include: Indiscriminate import of second hand textile machinery and low priced bearings, high custom duty on textile machinery components, Inverted duty structure on natural rubber and rubber latex, inadequate availability of natural rubber, high and discriminatory rates of taxation on cigarettes.

Also the volatility in prices of steel and other inputs in forging industry, Discriminatory Excise duty structure on Synthetic Fibres, exclusion of Alcoholic drinks' from the GST regime, High rate of Vat at 12.5% for the biscuit industry, Poor quality and availability of power for industrial gases industry, increasing operational cost and high imports in steel industry.

These issues need to be addressed by the government at the earliest for the industry to maintain its high growth momentum.

"Convergence towards a simplified and rational taxation system including removal of inverted duty structures should be the objective of the forthcoming Budget," said Banerjee.