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It seems that the efforts taken by Narendra Modi-led NDA government to revive India’s manufacturing sector is still far from showing results. The growth in India’s core sectors were recorded at 1.4% in February, or lowest in 16 months.
Clearly, government’s efforts to boost domestic manufacturing hasn’t find many takers yet and the Make In India campaign hasn’t made sufficient inroads.
As per the data made available by the Ministry of Commerce and Industry, the eight core sectors (coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity) that comprise of 38% of the Index of Industrial Production (IIP), growth in these core sectors have been falling since December (2.4%), January (1.8%).
Industry experts are naturally disappointed with the numbers but see a silver lining in the recently concluded coal mine auctions. The growth in coal sector was recorded at 11.6% as against 1.7% in January 2015 and a mere 0.9% in February 2014.
Ratings agency ICRA said, “”The slide in core sector growth for the second month in a row…is disappointing. Lead indicators for IIP growth for February 2015 remain bleak.”
The numbers are surely to reflect on Raghuram Rajan’s mind as Reserve Bank of India (RBI) readies its monetary policy to be announced next week.
India Inc will once again take shield against these core sector growth numbers to ask for a rate cut.
However, RBI is unlikely to provide any relief to the banks in terms of repo rate cut.
via NorthEast Calling http://ift.tt/19C8uGn
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