Economic Revival: CII Report

Economic Revival: CII Report

Question : Early signs of revival of the economy have been detected by the CII ASCON report. Elaborate on the findings of this report.

- Survey by the Confederation of Indian Industry’s Association Council has observed early signs of revival

- Of 93 sectors surveyed, proportion recording excellent growth which is higher than 20 percent during the April-June quarter of 2015-2016 was higher at 16.1 percent as compared to 7.1 percent in corresponding quarter of previous fiscal

- Survey respondents studied a number of SMBs as well as large enterprises and in many cases accounted for 70 percent of the total industry output in respective sectors

- There were fewer sectors anticipating negative growth

- There has been significant, perceptible movement in percentage points recorded by different sectors which were in moderate and negative growth category a year back

- Proportion of sectors reporting growth rate less than zero fell to 23.7% from nearly 27% in corresponding quarter of the previous year

- Share of sectors witnessing massive growth rate of 10 to 20% reduced to 9.7% from 14.3% a year ago

- Survey calls for revival of stalled projects and easing of interest rates

- It has also suggested removal of obstacles from supply side linkages for boosting the growth of the economy

- Study found more sectors clocked what was counted as excellent growth during Q1 of the current financial year

- There is no clear pattern regarding industry performance as IIP and Index of Eight Core Industries moved from acceleration to deceleration on a monthly basis

- As per the survey, capital goods industry was the worst off with moderate to negative growth rates being reported

- Consumer durables had the highest proportion of companies with excellent growth rates followed by basic goods sector

- Performance of consumer non durables and durable sector is an indicator of consumer spending and it indicates growth in the moderate category

Facts and Stats

Constraints for the growth of the economy identified by the CII survey are as follows:

- Margin pressure from the competition

- Competition from imports

- Shortage of power

- High regulatory burden

- Lack of domestic and export demand

- Shortage of skilled persons and talent

- High tax burden