India Inc presses for reforms as Feb IIP contracts 1.2%

India Inc today pitched for more reforms to create a conducive environment for investments and boost manufacturing as industrial output shrank 1.2 per cent to a four-month low in February.
The fall in industrial output as per data released on Wednesday was mainly on account of a decline in the manufacturing sector and lower offtake of capital as well as consumer goods.
Industry body Assocham termed the latest estimates of industrial production as a negative sign while strongly recommending to the government to initiate more effective short-term revival measures.
It also highlighted the need for creating a conducive environment for investments, capacity utilisation and augmentation of industrial production on priority basis.

The decline in IIP in February is mainly on account of 2 per cent contraction in manufacturing sector, which constitutes over 75 per cent of the index. The sector had recorded a meagre growth of 0.6 per cent in February 2016.
"It only indicates that the growth remains fragile in manufacturing and we need continued efforts to make the sector competitive. The government should continue its reform measures and deepen it in times to come to strengthen the manufacturing sector," Ficci President Pankaj Patel said.

During the last financial year from April-February, the IIP growth was nearly flat at 0.4 per cent as against a growth of 2.6 per cent in the same period previous fiscal.

Meanwhile, for January, the Central Statistics Office has revised the IIP growth rate at 3.27 per cent from 2.74 per cent in the provisional date released last month.
Assocham said the risks to the Indian economy continue to prevail in the form of uncertainty related to the next monsoon season, protectionist policies adopted by the US, change in the policy stance by RBI from accommodative to neutral, muted growth in fixed capital formation in GDP and mounting bad debts in public sector banks.