Focussed strategy on manufacturing growth needed: Montek

Concerned over the sluggish growth in industrial output in May, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said a focussed strategy would be required to accelerate growth in the manufacturing sector.

"Clearly (the IIP numbers) continue to show somewhat lower growth rate," Ahluwalia told reporters here as the May numbers slumped to 5.6% from 8.5% in the same month last year.

He, however said the May numbers could not be seen as "predictive" for entire fiscal.

"I don't think they (the May numbers) are necessarily predictive of the whole year... Hopefully, in the course of the year there will be some improvement," he said.

The slowdown in industrial growth in May is mainly due to the poor performance of the manufacturing and mining sectors.

The IIP numbers for April have also been revised downward to 5.7% from the earlier estimate of 6.3%, as per the new series with a base year of 2004-05.

Ahluwalia said the thrust has to be on accelerating the manufacturing sector, which constitutes over 75% of the total factory output.

"We need to have a much more focussed strategy for accelerating growth in manufacturing in the course of preparing for the 12th Plan (2012-17)," he said.

The Government aims to increase contribution of the manufacturing sector to 25% of the GDP by 2020 from the current level of about 16%.

The manufacturing sector grew by just 5.6% in May, 2011, as against 8.9% in the same month of 2010.

Ahluwalia further said the manufacturing growth during the current 11th Five Year Plan has been below expectations.

"It should be one of the objectives of the 12th Plan to analyse and to find out what needs to be done from policy point of view to produce a much faster manufacturing growth," he said.