Slow down in Industrial Growth is alarming

Two shocking data of economy slowing down cause a much panic in the system. The industrial numbers fell short of expectations. The index of six infrastructure industries registered a 6.3% rise during July compared to 10.3% in corresponding period of last year. Though core sector data is to be released before IIP statistics to provide an indication of where IIP is headed commerce and industry ministry have made it a habit of releasing data later and numbers are always given provisionally and later lowered. But one should keep in mind that the deceleration is also because of high base. At the same time to control negative growth in sectors like consumer durables and transport equipments there is an urgent need to review monetary policy of RBI. Policy has been recently made only to tame inflation causing an increase in cost to industry as credit rate has been hiking. Immediately steps must be taken to provide cheap credit to promote export and this will also check rupee appreciation. Infrastructure is also playing spoilsport. The industry capacity is increasing day by day without much development in infrastructure. The country needs more ports, roads, power and airports for further sustained development. All these need more participation from private enterprises and political will of course. The labour reform has been stagnated for long and its high time we should move towards it for increasing our labour efficiency.