Karnataka's key sectors may grow 25%: CII

A Confederation of Indian Industries (CII) survey forecasts a 25 per cent growth in production for the electronics, information technology (IT) and steel industry in Karnataka during April 2007 to September 2007.

"Registering an impressive 20-25 per cent growth in production, Karnataka's electronics, steel and IT industry have been buoyant during October 2006 "" March 2007," revealed the Bi-annual Industry Monitor Survey conducted by the Confederation of Indian Industry (CII) "" Southern Region.

The CII carried out the survey to analyse the performance of the top five sectors of the southern region states during October 2006-March 2007 and to provide an outlook for April-September 2007 while identifying their issues and concerns. The key sectors identified are automobile and auto components, IT, engineering, electronic and steel industry.

The steel industry in Karnataka had shown buoyancy during October 2006-March 2007, indicated by 20-25 per cent increase in production, 15-20 per cent increase in sales and 15-20 per cent increase in exports. The value of production has risen 10-15 per cent during the same period. The employment level too increased by 10 per cent.

The steel industry is expected to have a good half year, from April 2007 "" September 2007 with an increase in production is projected to be 20-25 per cent, and that of sales and exports to be 15-20 per cent.

The electronics industry of Karnataka has also performed well in October 2006-March 2007, registering a 20-25 per cent increase in production, 15-20 per cent increase in sales and exports. Though the pricing has remained at the same level, the increased sales has helped the industry increase the profit margin realisation by 5 per cent. The employment level in the industry has gone up by 10 per cent.

The industry experts expect the electronics industry to register an excellent performance during April 2007 "" September 2007. The industry expects an increase in production of 20-25 per cent, 15-20 per cent increase in sales and exports respectively.

The key industries have suggested to the government to effect a significant reduction in the service tax duty. The information technology sector of Karnataka registered a mixed trend in October 2006 - March 2007. The increase in demand of 15-20 per cent has resulted in sales by around 20 per cent, overseas billing by 20-25 per cent and manpower utilisation by 10 per cent.

The IT sector is expected continue its journey in the positive growth trajectory during April 2007 "" Sept 2007. According to industry experts, on the back of an expected 15-20 per cent increase in demand, its revenue is expected to increase by 20-25 per cent.

The engineering industry has witnessed a moderate performance during October 2006-March 2007. The production rose 5-10 per cent and the sales 10-15 per cent, which resulted in a 5 per cent increase in profit margin. The engineering industry expects a 10-15 per cent growth in the production level and 5-10 per cent growth in sales during April 2007 "" Sept 2007. The increased production is expected to push the capacity utilisation levels by 5-10 per cent.

During October 2006-March 2007, the automotive and auto components industry in Karnataka recorded the same level of performance as experienced in the previous six months, and there was an employment of 3 per cent in the industry. The industry is expecting a moderate performance during April 2007 "" Sept 2007. The production level is likely to increase 5-7.5 per cent, sales 10 per cent and capacity utilisation by 2-5 per cent.