Industry faces weak demand despite high growth rate: India Inc

Notwithstanding government's projection of higher growth at 7.4 per cent this fiscal, India Inc today said demand remains weak, and sought steps in the forthcoming budget to boost investments and kick start the capex cycle.
"This is a positive news for the economy. However, we must remember that large segments of the industrial sector are still faced with muted demand and a sustained increase in GDP requires both investment and consumption demand to move full speed ahead.
"Recovery in the domestic capex cycle continues to be a key concern. We are looking forward to the ensuing budget and hope to see more measures by the government to give a boost up to the investment cycle," Ficci President Jyotsna Suri said.

Indian economy will grow by 7.4 per cent this fiscal, outpacing China to become the world's fastest growing economy the government data today showed, after a revision in the method of calculations.
"The investment is yet to revive, consumer demand is not returning with a significant pace despite a sharp reduction in crude oil prices," Assocham Secretary General D S Rawat said.
He said that while the government shifts to the new methodology and the base year to 2011-12, the old method of measuring with the base year of 2004-05 should simultaneously be released.

"We cannot have a situation where the entire economic paradigm looks ultra optimistic from an subdued environment just because a methodology is altered, something looks wrong somewhere," Rawat said.

The data further said economy grew by 7.5 per cent in the September-December quarter of the current fiscal after a growth rate of 8.2 per cent in the preceding quarter.
CII Director General Chandrajit Banerjee said: "The Union Budget may consider some measures to revive investment, particularly in the sectors which are experiencing slowdown. Further, the data shows significant moderation in inflation as measured by the GDP deflator, which should provide comfort to the RBI in reducing interest rates to a much greater extent".
"Implementation of the reforms measures at the grassroots level would be critical to ensure the strength of recovery, going forward," PHD Chamber President Alok B Shriram said.

The sectors which registered a growth rate of over 7 per cent are financial, real estate and professional service; trade, hotels, transport, communication and services related to broadcasting; public administration, defence and other services; and electricity, gas, water supply and other utility services.
Growth in the agriculture, forestry and fishing; mining and quarrying; construction and manufacturing' is estimated to be 1.1 per cent, 2.3 per cent, 4.5 per cent and 6.8 per cent, respectively.
The government had recently updated the base year to calculate Gross Domestic Product (GDP) to 2011-12 from 2004-05.
The data further showed that GDP at current prices in 2014-15 is likely to attain a level of Rs 126.54 lakh crore, up 11.5 per cent from Rs 113.45 lakh crore in 2013-14.