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The CII ASCON Industry Survey for the April – June FY16 quarter reveals a reversal from the earlier trend of slowing growth, with indications of a recovery taking shape in the economy, albeit a slow one. The latest Survey, which tracks the growth of the industrial sector through responses collected from sectoral industry associations, reveals a slight improvement in growth trends in terms of production over the corresponding quarter a year ago. The CII ASCON Industry Survey which tracks the growth of different industrial and services sectors of the economy, is based on the feedback collected from industry associations affiliated to CII. The industry associations encompass wide range of sectors comprising of small, medium and large enterprises. In most of the cases, these account for approximately 70% of the total industry output in the respective sectors. The Survey was conducted from mid-June till end of July 2015 and tracks the estimated growth trends in terms of Production, Sales and Exports for Q1 FY 16.Responses have been segregated in the following four broad categories: (i) ‘Excellent’ (growth in excess of 20%), (ii) ‘High’ (growth in the range of 10-20%), (iii) ‘Moderate’ (growth in the range of 0-10%) and (iv) ‘Negative’ (growth less than 0%). Of the 93 sectors surveyed, the share of sectors that have recorded excellent growth of more than 20 percent in Q1 (April –June) FY16 quarter has surged up to 16.1 percent (15 out of 93 respondents) as against 7.1 percent (8 out of 112) recorded in the year ago period. This is a clear indication of improvement over the last year. While the share of sectors witnessing a high growth rate of 10 to 20 percent has reduced significantly to 9.7 percent (7 out of 93) in April-June FY16 from 14.3 percent (16 out of 112) during the corresponding period a year ago, the share of sectors reporting moderate growth has declined marginally to 51.7 percent (47 out of 93) as compared to 51.8 percent in the year ago period. At the same time, the number of sectors recording negative growth has fallen from 26.9 percent (30 out of 112) in the first quarter last year to 23.6 percent (21 out of 93) in the first quarter this year. On the issues and concerns impacting growth, margin pressure from stiff competition, competition from imports, shortage of power, high regulatory burden, lack of domestic and export demand, shortage of skilled labour and talent and high tax burden have been cited as the most important constraints by more than 50 percent of the respondents.

CII ASCON Industry Survey, Quarter 1, 2015

Confederation of Indian Industry

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The Indian Manufacturing sector is at an important juncture today. Of late, the sector has been witnessing a boost with the launch of the “Make in India Campaign” that aims at promoting India as an important investment destination and a global hub for manufacturing. Since the last one year, there has been much activity, both at center and state levels, in the form of policy amendments, procedural simplifications and promotional measures to revive manufacturing growth. Over the next decade, the performance of the manufacturing sector will be critical for achieving India’s overall aspirations of growth and employment. Achieving these aspirations would not be easy and will require coordinated efforts to develop necessary enabling infrastructure, tap new avenues for growth and improve labour and capital productivity. It will also require to take a holistic and systemic view to bring in some fresh thinking and alignment between different stakeholders. CII has been strongly advocating for creating an enabling policy and regulatory framework for taking India’s manufacturing story forward. This issue of Policy Watch takes an in-depth look at the sectoral issues and has outlined some specific recommendations to reinvigorate the growth momentum in the Manufacturing sector.

CII Policy Watch: Manufacturing