Economy gaining momentum a good sign for the future, says ASSOCHAM

Terming the IIP numbers for August as 'encouraging,' apex industry body ASSOCHAM today said that it is pleased to see finally the green shoots of economic activity getting converted into strong industrial growth figures.

"On the whole, these estimates put forward certain positive indications of growth revival, however, the policy makers need to continue with the proactive stance to support these developments," said Mr Rana Kapoor, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

"The good performance of manufacturing, capital goods and consumer durables sector in particular seems to have resulted in the favourable development," said Mr Kapoor.

"The manufacturing growth seems to be gaining momentum as is evident from the growth numbers," he added.

"There also seems to be some turnaround in the consumer goods sectors, however, the slightly sluggish performance of the electricity and basic goods sector are the causes of concern," the ASSOCHAM chief said further.

"The government needs to address the peculiar challenges faced by these segments," said Kapoor.

"The recently announced reduction in repo rate by 50 basis points is a step in the right direction," he said.

"We at ASSOCHAM believe that competitive interest rates are necessary for reviving investor sentiments which, in turn would help put the economy back firmly on to the growth trajectory," said the ASSOCHAM president.

"The Government now needs to complement RBI's policy review with appropriate measures," he added. "It needs to keep on pushing at more ground level reforms and improve implementation so as to realize the economy's true potential."

ASSOCHAM feels it is extremely important for the growth momentum to be maintained.

"We have for long been highlighting the need for creating conducive environment for investments, capacity creation and augmentation of industrial production on priority basis," said Mr Kapoor.

ASSOCHAM strongly recommends to the Government of India to initiate more effective short term revival measures. "Boosting investor sentiment is the key.