There is some cheer, however feeble, over the figures for industrial production coming in higher at 2.6 per cent when everyone was expecting it to be a negative 0.8 per cent. This comes soon after the decrease in the current account deficit (CAD).
While these are welcome developments, the quality of the rise in industrial production figures show the weakness behind the growth numbers. While the manufacturing sector, which is the backbone of the economy and employment, has shown a spurt in growth, it is the 336 per cent year-on-year (y-o-y) annual growth of the “cable, rubber insulated” segment that added weight to the sector, which in turn saw capital goods spurt to 15.6 per cent. If this is removed, the actual growth would have been just 0.9 per cent y-o-y.
Even on the CAD front, the reduction was due to lower gold imports and not any significant spurt in exports or decrease in imports of non-essential items like airconditioners and washing machines, mobile phones or other electronic goods, all items that could be made in India.
Anand Sharma, who holds the vital industry/commerce portfolio, needs to find out from industry associations, and not the elite chambers of commerce, what is holding back manufacturing. India recently lost a $3 billion investment by China’s largest tyre manufacturer to Thailand because of red tape and corruption. Perhaps if he even looks into why the Chinese company left he would find an answer and ensure that the guilty are dealt with firmly.