Industrial growth likely to decelerate sharply in Q1 in FY13: CII survey

Global woes affected export markets and lack of availability of credit are hurting the growth

Industrial growth is expected to decelerate sharply in the first quarter of the current fiscal on the back of the country's GDP registering a nine-year low growth of 5.3% in the fourth quarter of 2011-12, a CII-ASCON Survey has said.

"The issues constraining production growth were low investment rate due to high interest rates, depreciating rupee and high inflation affecting cost and demand," it said.

Besides, the survey said that deteriorating global economic scenario has affected export markets and lack of availability of credit to industry are other factors hurting the growth.

Industrial production fell 3.5% in March, for the first time in five months.

CII said the survey covered 114 sectors comprising more than 35,000 companies.

The sectors with high growth (10-20%) is estimated to have decreased to 24.5% in the first three months of 2012-13 from 31.8% in the same period last year, it said.

The sectors such as cement and fertilisers showing low growth (0-10%) are estimated to have moved up to 52.6% in April-June 2012 compared to 42.2% in the same period last year, the survey stated.

Those showing 10-20% growth fall in the high category and 0-10% in the low group.

In order to spur investments and boost growth, industry chamber CII asked the government to step up measures to put the economy back on the growth trajectory.

"The situation calls for concerted efforts from the government and RBI to ensure that there is a cohesive economic recovery plan," CII  Director General Chandrajit Banerjee said.

Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low, both in the March quarter at 5.3% as well as in 2011-12 at 6.5%.