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| Stimulus to have effect from April-May: Pronab Sen |
| Press Trust of India / New Delhi Apr 10, 2009, 16:02 IST |
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With stimulus packages failing to spur industrial production, Chief Statistician to the government Pronab Sen today said the fiscal measures will have start having an impact on industry from April-May onwards.
In an interview to PTI, Sen also attributed the fall in industrial production in February largely to negative growth in consumer non-durable goods, particularly sugar.
"Stimulus packages will start having an effect from April-May onwards," said Sen, who is also Secretary to the Ministry of Statistics and Programme Implementation.
Sen said tax cuts will have much quicker effects, but expenditure measures take some time to produce results.
The government has so far announced three stimulus packages in which excise duty was cut by six per cent and service tax by two per cent, planned expenditure was raised, infrastructure re-finance company IIFCL was allowed to mobilise resources through tax-free bonds, and so on.
However, despite these measures, industrial production is not showing any perceptible improvement.
In February, industrial growth again turned negative as factory output declined to a 15-year low of 1.2 per cent.
"The main reason for the negative number in February IIP (Index of Industrial Production) is that... We saw negative numbers for consumer non-durables and this is coming largely from sugar," Sen said.
The production of consumer non-durables, which constitute 23.3 per cent of the IIP, declined by 5.5 per cent in February. Sen said data showed that sugar production fell 50 per cent in February.
According to industry estimates, sugar output may fall to 14 million tonnes in the 2008-09 season (October-September) from 26.4 million tonnes in the previous year.
Food Ministry officials maintain that sugar output will be 16 million tonnes in the current season, but say that the industry estimate might turn out to be true as sugarcane has been diverted for manufacturing gur.
In view of lower production, the Centre had in February allowed raw sugar import for sale in the domestic market.
To augment the supply of sugar in the domestic market, the Cabinet, in its meeting held yesterday, is believed to have approved the import of white (refined) sugar at zero duty.
If provisional IIP figures are considered, industrial production contracted for the third time in a row in February. However, negative industrial growth at 0.5 per cent estimated provisionally for January was revised upwards to a positive 0.39 per cent.
Also, provisional estimates had shown industrial output falling by 0.4 per cent in October, but now revised figures showed it to be rising by 0.11 per cent.
Sen said wide differences between provisional figures and revised ones are because companies send data late. For provisional figures, companies are asked to send their data for each month by the end of the following one.
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