ASSOCHAM Reaction: IIP for February 2016

akash dwivedi----Terming the February 2016 IIP numbers ‘encouraging,’ apex industry body ASSOCHAM said that it is pleased to see the positive industrial growth figures as industrial production had been in the negative territory for the last three months. “The good performance of electricity, mining, basic and consumer durable goods in particular seems to have resulted in the favourable development,” said Mr Sunil Kanoria, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM). “However shrinkage in production of capital goods and consumer non-durables are going to be the key challenges in days to come,” said Mr Kanoria. “The declining growth of manufacturing sector indicated by 0.7 per cent growth in February 2016 as compared to 5.1 per cent in the same period in 2015 also needs policy intervention,” he added. “The continuing subdued growth of manufacturing sector has got wider implications and needs to be addressed on priority basis,” further said the ASSOCHAM chief. ASSOCHAM is hopeful that amidst the recent budget announcement of Government’s commitment towards fiscal consolidation combined with the Reserve Bank of India (RBI) reducing repo rate by 25 basis point in its First Bi-monthly Monetary Policy Statement for FY 2016-17 would further help the industry in gaining a strong foothold and sustained growth. “Competitive interest rates are necessary for reviving investor sentiments which in turn would help put the economy back firmly on growth trajectory, however it is now the responsibility of banks to pass on benefits of rate cuts to the end consumer,” added the ASSOCHAM chief.