Industry under considerable pressure: CMIE

KOLKATA, MAY 2. The Indian industry ``is being subjected to increasing pressure" with the lifting of quantitative restrictions (QRs) on imports, the Centre for Monitoring for Indian Economy (CMIE) said in its report on the Indian economy.

The report said lifting of QRs would increase the inflow of goods from foreign countries. Although the Government had given some sort of protection to the domestic industry by way of increased import duties, CMIE said these measures would do `little' to ward off the competitive threat from cheaper products. This would directly make an impact on the Indian industry in the form of increased competition, the report said.

Commenting on the industrial growth the report said the index of industrial production (IIP) for January showed a very low growth of 2.8 per cent as compared to 3.3 per cent in the preceding month.

The growth of the manufacturing sector had been weighed down by sectors such as paper and non-metallic mineral products, the report said. The slowdown had also been reflected in respect of capital goods production to 2.7 per cent in April-January 2000-01 as compared to 6.6 per cent in the previous year.

Sectors which recorded higher growth during the period included food products, rubber, plastics and petroleum products, metal products, textiles, medical and surgical instruments, and syringes. Lower growth was recorded in sectors such as chemical products, machinery and equipment, cotton and synthetic textiles, beverages and leather.

However, the growth in the industrial sector is likely to decelerate during the last quarter of the fiscal, the report said. This surmise was based on the poor growth rate of IIP coupled with lifting of QRs with effect from April 1, it said.

Commenting on the growth rate of the Indian economy, the report said the GDP would likely be lower than 6.4 per cent in the current financial year.

- PTI

Send this article to Friends by E-Mail

Section  : Business
Previous : Six sectors account for 30 p.c. of FDI
Next     : A new technology venture capital fund