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 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.
The Survey’s respondents have expressed their optimism in a further improvement in the near-term growth outlook helped by continued policy actions, implementation and enhanced business and consumer confidence. However, a sustainable recovery would be conditional on improvement in domestic demand and investment revival.
The Survey has recommended an array of policy measures to boost growth. Some such steps include reduction in interest rates, speedy implementation of infrastructural projects and addressing supply-side constraints on a variety of fronts including infrastructure, energy, agriculture and labour.