Growth rate in industrial production of core sector is continuously declining and come down to 0.1% in March 2015. This in respect of eight core sectors that together have 38% share in industrial production. These Key sectors are steel, cement, natural Gas etc. During the year 2014-15 this growth came down from to 3.5%. From 4.2% in 2013-14. In December, January & February 2015, it was 2.4%, 1.8% & 1.4% respecting which further came down to 0.1% in March 2015.
As a result, the overall index of industrial production will be disappointing in March 2015 causing a serious worry to economists in country. The cause of this continuous fall in Growth may be poor condition of our infrastructural projects. The recovery of banks is also adversity effected as around 3.5 lakh crores of banks are blocked in 85 such projects.
The demand of steel and cement is continuously declining as property market is down since last 2 years and only few new projects are coming as compared to position prevailing around 2 year back. The cement production was lowest in March 15 in last 52 months.
Stagnation in core sector and decline in merchandise trade, measure need to be initiated to promote construction activity which creates great demand for steel, cement and other construction material. Banks also need to come out with strategies to promote financing for construction activity.
B.K Jain, Dean MBA