Indian Industries Post A Mixed Picture In The First Half Of 2017-18

India’s gross domestic product has grown 6.3% in the second quarter of the current year, that is, 0.6 percentage points higher than that of the previous quarter.

- Tushar K. Mahanti

If the growth rate is still far below than what was achieved in the past, the North Block is jubilant that the economy is coming out of a decelerating growth path.

Whether this could be treated as a turnaround is a debatable issue, but what must be encouraging is that the manufacturing sector’s growth, after nosediving in the first quarter, has given reason for future hopes. Manufacturing output has grown 7% in the second quarter against 1.2% in the first quarter.

Backed by an improvement in the ranking of ease of doing business earlier there was a general perception that a better investment scenario would now attract more funds to industries. In fact, the investment scenario changed significantly last year. After a sharp fall in 2015, proposed investment as also the number of industrial investment proposals filed increased significantly last year. The total number of industrial investment proposals signed increased from 1,998 in 2015 to 2,283 last year. The proposed investment in them increased by a huge 33% during the same period from ₹3.11 lakh crore to ₹4.14 crore.

These are only proposals and past experience shows that only a handful of them are actually implemented. But the fact remains that industries have shown faith in the economy to propose so many new units.

Even the foreign investors had turned upbeat last year. The total inflow of FDI increased about 18% last year from $39,326 million in 2015 to $46,402 million.