Tuesday, June 10, 2008

Higher inflation derailed industrial production

by Jo Black

Reacting on the extremely poor performance of the industrial promotion sector in March 2008, which fell to a meager 3% from 14.8% in March 2007, the President of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Mr Venugopal N. Dhoot, said that inflation has primarily been responsible for the massive loss in industrial production.

He said that as a result of consistently higher inflation in the last one year or so, inputs cost for manufacturing substantially increased and higher fuel costs augmented transportation costs, the combination of which further proved lethal for falling industrial production.

The Indian Inc continues to suffer the onslaughts of extremely disruptive and erratic power supplies in the last few months as a result of which the industrial production also fell substantially by about 30 to 35%, said Mr. Dhoot.

Implications of all these factors amounted to a fall in industrial production by over 11% and manufacturing loss of over 13% in March 2008.

Due to severe loss not only in industrial production but also manufacturing, India’s GDP projections will suffer major hits for fiscal 2008–2009 and therefore, it is advised that the Government takes sufficient measures to put proper infrastructure in place for its industrial and employment growth, said Mr. Dhoot.

 

 

 

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