NEW DELHI, June 5: Indian Industrialists now feel that economy is moving towards right direction and there are signals pointing to a strong revival in the economy with sentiments far more inspiring than before. According to a survey conducted by apex Industrial body and CII and ASCON among industrialists, most of them are coming out with positive outlook compared to what they felt six months back. The survey by ASCON, which tracks the growth of economic sectors on a quarterly basis, based on feedback received from sectoral industry associations, shows that while a majority of the sectors are still continuing to witness ‘moderate’ growth rates of ( 0 to 10 per cent) with ‘excellent’ (above 20 per cent) and ‘high’ (10-20 percent) growth limited only to few sectors, there has been a sharp decline in the share of sectors registering ‘low’ growth of (below 0 per cent). Of the 102 sectors surveyed, the share of sectors registering ‘Excellent’ growth of more than 20 per cent has remained constant at 9.8 per cent (10 out of 102) witnessed in the same quarter a year ago period. However, the share of sectors witnessing ‘high’ growth of 10 to 20 per cent has surged substantially to 20.6 per cent (21 out of 102) as against 10.8 percent (11 out of 102) recorded in the same quarter previous year. At the same time, the share of sectors witnessing ‘moderate’ growth of 10 to 20 per cent has witnessed a marginal decline to 45.1 per cent (46 out of 102) in the January -March FY16 from 49.0 per cent (50 out of 102) during the corresponding period a year ago. The number of sectors recording ‘Low’ growth has declined significantly to 24.5 per cent (25 out of 102) in Q4 FY16 from 30.4 per cent (31 out of 102) in the same quarter previous year. The number of sectors showing excellent and high growth has shown some improvement in the Q4FY16 with around 75.3 per cent of sectors recording positive growth in Q4FY16 as compared to 69.8 per cent in Q4FY15. An analysis of growth trends on a sequential quarter-on-quarter basis also presents improvements in the growth trends in Q4FY16 as compared to the Q3FY16. According to the survey, while there has been a marginal increase in the percentage of sectors reporting ‘excellent’ growth, there has been a substantial surge in the share of sectors reporting ‘high’ growth. The share of sectors reporting high growth has increased to 20.6 per cent (21 out of 102) share in Q4FY16 from 6 per cent (6 out of 100) in the previous quarter. On the other hand, while the share of sectors recording ‘Moderate’ growth has dropped to 45.1 per cent (46 out of 102 sectors) as compared to 53.0 per cent (53 out of 100 sectors) in Q3FY16. The number of sectors recording ‘Low’ growth has declined significantly with 24.5 per cent (25 out of 102 sectors) in Q4FY16 as against 33 per cent (28 out of 100 sectors) in Q3FY16. The movement of sectors from lower to higher growth rates clearly points towards an improvement in the growth trends. On capacity utilization, an indicator of demand acceleration in the economy, the Survey reveals improvements in the January-March quarter. According to the Survey, around 53.3 percent of the respondents have reported capacity utilizations in the range of 50 to 75 per cent for January – March FY16 quarter registering a slight improvement from the last quarter. 30.8 per cent of the respondents have reported it to be in the range of 75-100 per cent when compared to 21.4 per cent recorded in the last quarter. The trend is expected to continue in the coming quarters as well. With respect to issues and concerns impacting growth, lack of domestic demand (58.8 per cent), high tax burden (50.0 per cent), cost and availability of finance (41.7 per cent), competition from imports (40.0 per cent) have been cited as the most important constraints by more than 40 per cent of the respondents. The Survey respondents have emphasized the need for intensive action on reforms related to trade and the business environment and have stressed on improving the ‘Ease of Doing Business’ indicators with a focus on removing the massive transaction costs by enabling efficient processes and a conducive taxation system to help integrate India into global supply chains. These measures, coupled with sustaining the reforms agenda, particularly ensuring quicker progress on reforms such as the GST Bill and LARR (Amendment) Bill, 2015, will impart greater certainty to investors on the policy front. Commenting on the performance of the sectoral growth trends, Ms Shobana Kamineni, President Designate and Chairperson, Associations’ Council, Confederation of Indian Industry (CII), said that “While the pace of economic activity remains uneven across sectors, participation of more and more sectors in the uptick is pointing to a strong revival in the economy with sentiments far more inspiring than before. We are hopeful that going forward, given the government’s continued focus on reviving demand, the current uptick in growth momentum is likely to be supportive of a robust recovery in the coming quarters.” (UNI)
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