India's manufacturing sector is expected to grow by 9.5 percent in 2008-09, up from 8.8 percent last fiscal, according to a survey by an industry lobby.
The survey on manufacturing industry, carried out by the Federation of Indian Chambers of Commerce and Industry (Ficci), among 25 core sectors, 21 capital goods, 15 intermediate goods, 26 consumers durables, and 13 consumer non-durable sectors, holds out this prognosis.
"Of the 100 sectors surveyed, as many as 67 are poised to achieve 'excellent' to 'high' growth rates ranging from 10 to 20 percent or more. While 12 sectors project excellent growth of more then 20 percent, 55 foresee high growth of 10 to 20 percent, 32 sectors expect moderate growth of up to 10 percent and one sector has projected negative growth during 2008-09," the survey said.
The study cited various reasons for the optimistic projection that include increased investment, increasing mergers and acquisitions, focus on high-end and superior technology products, higher demand for sophisticated lifestyle products, entry of foreign companies in various industry segments and higher export prospects.
"While the present situation may continue for next two-three months, the manufacturing industry would be able to revive and achieve higher growth during the terminal period of the financial year 2008-09 provided the government takes some pro-active reform measures to redress the genuine grievances of the manufacturing industry", the survey said.
"While the farm loan waiver scheme and the proposed salary hikes of government employees will help generate more demand for manufactured items, there is need for stimulating consumption reducing interest rates and no further cuts in custom duty on manufactured goods," the chamber said.
{{/usCountry}}"While the farm loan waiver scheme and the proposed salary hikes of government employees will help generate more demand for manufactured items, there is need for stimulating consumption reducing interest rates and no further cuts in custom duty on manufactured goods," the chamber said.
{{/usCountry}}"There is the need for ensuring relief package for exporters, increasing rate of depreciation, reducing corporate tax rate and correcting anomalies due to inverted duty structure existing in the tax structure," the study said.
It also underlined the need for adopting appropriate raw material policies, improving regulatory environment, helping capacity building of small and medium enterprises (SMEs), skill development and improving infrastructure for helping the industry achieve lower cost, improved quality and better performance.