Pickup in second half likely

By Our Special Correspondent

MUMBAI, AUG. 28. The Reserve Bank of India today stated that leading indicators of industrial activity and business confidence suggest prospects of a modest revival in industrial sector only in the second half of the year, in alignment with the usual seasonal upturn in industrial activity.

Non-food credit offtake, an indicator of industrial activity, has been sluggish. Bank credit to the commercial sector during 2001- 02 (up to July 27) decelerated to 1.9 per cent from 2.6 per cent during the corresponding period in the previous year. The offtake of non-food credit of scheduled commercial banks was lower at Rs. 1,714 crores against Rs. 14,482 crores.

Export growth decelerated to 1.7 per cent in April-June 2001 from 26.6 per cent in the first three months of 2000-01. On the domestic front, the fiscal deficit has been budgeted at 4.7 per cent of GDP and over three-fourths of Centre's net borrowing requirement has already been completed. The Centre's gross fiscal deficit at Rs. 42,198 crores during April-June, 2001 was higher by 68.3 per cent over the same period in 2000-01.The revenue deficit for the quarter was almost double the level of the first quarter of 2000-01, reflecting the continuing slowdown in revenue collections, both tax and non-tax. On the other hand, growth in expenditure was higher in the revenue account and in the capital account during April-June 2001 over the level in April-June 2000.

Foreign direct investment inflows at $608 million in April-June, 2001 were marginally lower than those in the corresponding period of the preceding year. However, net inflows on account of FIIs at $632 million in the first three months of 2001-02 were higher than in the corresponding period of 2000-01.

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Section  : Business
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