Concerned over the sluggish growth in industrial output in May, the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, has said a focussed strategy would be required to accelerate growth in the manufacturing sector.
“Clearly (the IIP numbers) continue to show somewhat lower growth rate,” he told reporters here today as the May numbers slumped to 5.6 per cent from 8.5 per cent in the same month last year.
He, however, said the May numbers could not be seen as “predictive” for the entire fiscal.
“I don’t think they (the May numbers) are necessarily predictive of the whole year... Hopefully, in the course of the year there will be some improvement,” he said.
The slowdown in industrial growth in May is mainly due to the poor performance of the manufacturing and mining sectors.
The IIP numbers for April have also been revised downward to 5.7 per cent from the earlier estimate of 6.3 per cent, as per the new series with a base year of 2004-05.
Mr Montek Singh Ahluwalia said the thrust has to be on accelerating the manufacturing sector, which constitutes over 75 per cent of the total factory output.
“We need to have a much more focussed strategy for accelerating growth in manufacturing in the course of preparing for the 12th Plan (2012-17),” he said.
The Government aims to increase the contribution of the manufacturing sector to 25 per cent of the GDP by 2020 from the current level of about 16 per cent.
The manufacturing sector grew just 5.6 per cent in May 2011 against 8.9 per cent in the same month of 2010.
He further said the manufacturing growth during the current 11th Five Year Plan has been below expectations.
“It should be one of the objectives of the 12th Plan to analyse and to find out what needs to be done from policy point of view to produce a much faster manufacturing growth,” he said.
He said the country needs to fast-pace its economic growth and manufacturing would form a major component of any such acceleration.
“On average we have seen more than 7-8 per cent growth and actually we need to get 10 per cent. And I think a lot of that has to do with improved infrastructure and better availability of power and so on. And that has to be the thrust for the next Plan period,” he said.