Industrial growth decline in July – CII

13 Sep '07

2 min read

Confederation of Indian Industry (CII) feels the declining industrial growth in the month of July of the current financial year 2007-08 as transient phenomenon.

The quick estimate of the Index of Industrial Production for the month of July 2007 released by the Central Statistical Organization shows the declining industrial growth for the period April-July of the financial year 2007-08.

The Index has registered a growth of 9.6 per cent as compared to 11.1 per cent recorded for the same period in the last financial year.

The overall decline is because of the negative growth (-0.3) recorded by the Consumer durables goods sector as against 15.2% growth during the same period in the last financial year.

CII understands that the negative growth in the Consumer durables sector can be partly attributed to the continuation of monetary tightening measures announced in the annual monetary policy statement for the financial year 2007-08.

CII finds out that the diminishing consumer demand in the economy as reflected in the declining private final consumption expenditure in terms of GDP to 58.8% in the first quarter from 60.8% for the same period of the previous final year can explain to some extent the declining industrial growth.

In addition, the declining exports growth to 17.9% from 18.6% of GDP due to the appreciation of rupee can be another significant reason for declining industrial activities.

Confederation of Indian Industry

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