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India on path to achieving 10 percent industrial growth
By Aritra
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Tuesday, 27 February 2007, 18:30 IST
NEW DELHI: India is well on the path of achieving the 10 percent industrial growth target set by the Planning commission. The Economic Survey for the fiscal year ending 31 March carried out by the government pointed out that the target is "eminently achievable," owing to growth in automobile production and electricity generation increase.
It may be mentioned here that the Planning Commission has set a target of 10 percent industrial growth rate for the five fiscal years beginning 1 April; the industry sector has grown 10.6 percent so far this fiscal year, thus achieving the highest growth since 1996, the survey said. India's industrial growth over the last five years ending 31 March will be 8.7 percent, lower than the 10 percent target.
Companies, including General Motors and Reliance Industries are producing more cars and oil products in Asia?s fourth-largest economy as record bank lending and higher salaries spur consumer spending. The pace hinges on the country removing infrastructure impediments such as power generation, noted a leading publication.
"Capacity addition through investment is critical for accelerating growth in industry," the survey said. "The investment scenario looks quite optimistic, particularly with rising domestic savings rates and foreign direct investment flows."
While the demand for durable goods is rising with economic expansion and easier availability of credit, the country's industrial growth has been rising on the back of higher manufacturing of cars, washing machines and motorcycles.
The survey noted that "infrastructure upgrades, an enabling fiscal infrastructure and enhanced accessibility to credit are some crucial policy aspects which need to be addressed immediately to ensure that the targets are met."