Expressing concerns over decline in factory output, Indian industry on Tuesday said a high level committee under the Prime Minister should look into the issue of industrial slowdown and monitor its progress for the next few months.
Dampening the efforts for economic recovery, industrial output contracted by 0.6 per cent in December, the second consecutive month of decline, mainly due to muted activities in manufacturing and mining sectors.
The IIP data released on Tuesday has dimmed hopes of recovery in manufacturing in the near future, Ficci President Naina Lal Kidwai said, adding: "It is definitely a cause for serious concern as both consumer goods and investments have witnessed negative growth.”
She said in a statement that while new project announcements have tapered off, the existing projects are suffering with cost and time overruns indicating a need for improving and strengthening implementation in order to ensure project completion.
"We feel that these disappointing figures certainly call for high level Committee under the Prime Minister to look into the issue of industrial slowdown and monitor its progress for the next few months" Kidwai said.
She also asked the Reserve Bank to further reduce interest rates.
"The new Cabinet Committee on Investments also needs to consider and clear the pending projects within the shortest possible time," Kidwai added.
Sharing similar views, CII asked has the government not to raise any tax or duties in the forthcoming Union Budget.
"Sentiments are already reflected in the IIP figures and CII does not want to see any announcements which would hurt industry’s confidence," it said, adding that the industry body hopes the Budget would take bold decisions to rejuvenate demand and boost investor confidence.
Assocham President Rajkumar N Dhoot said the continued fall in intermediate and capital goods production indicates that the revival is a distant dream.