Indian Industry to Sustain Growth
Allaying apprehensions of a slowdown in the face of inflationary expectations and high interest rates, the government has said industrial growth will remain robust in 2007-08 on the back of impressive performance by the capital goods sector.
"High rate of 14.1% growth of manufacturing in March and 12.3% in the whole of 2006-07is expected to be sustained in this year as well," department of industrial policy and promotion secretary Ajay Dua said. He said major contribution to manufacturing sector has come from a sharp increase introduction of capital goods and intermediates in contrast to consumer goods. The capital goods sector registered a 17.7% growth while production of intermediate goods was up11.7% in 2006-07.
"High rate of growth of capital goods indicates that new production capacity is being added driven by consumer demand. Both the consumer demand and investment in capacity will continue to grow," Dua said. "Increasingly liberal attitude to FDI in manufacturing and infrastructure is being adopted by the government. We are reviewing the ceilings on FDI in various sectors every year and reducing the number of clearances required," he added.
In 2006-07, FDI inflows have witnessed an increase of 284% to $15.7 billion from $5.5billion. "This year, we are expecting FDI of $25 billion in equity and $5 billion of earnings reinvested by existing companies," he said.
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