Finance Minister Pranab Mukherjee today expressed disappointment after the industrial output data in April reflected an almost zero-growth economy, but promised that the government is committed to boosting the economy and investor sentiment.
IIP, the key measure of industrial output, grew merely at 0.1 percent in April 2012 from the same period last year
due to contraction in capital goods and dip in manufacturing output,
reflecting the sluggish state of the economy. Mukherjee said the government cannot take comfort from the fact the industrial output turned positive in April from from negative a month ago. The performance of the capital goods sector was disappointing, the Minister said, adding that only 12 out of 22 major industrial groups showed positive growth.
Mukherjee said he was disappointed that things have not picked up in the economy and assured investors that the government is taking steps to improve the negative sentiment by ensuring faster project clearances and attracting new investment.
Addressing the concerns plaguing India, Pranab said the government has taken steps to encourage investment in long-term infrastructure through the infrastructure debt funds and relaxation of external commercial borrowing norms. In addition, the government is attempting to resolve the State Electricity Board and Financial Sector issues.
On the financial front Pranab again painted a rosy picture by saying that not only the public banks but regional banks have also performed well and promised that the banking payment structure will be at par with global standards.
Stressing on the need for rural banking, Pranab said that every village which has a population of over 2,000 people will be brought under the banking ambit. Over 3 crore banking accounts have been opened and Pranab said that each family in these villages will have bank accounts. The finance minister also emphasized on loans for education, especially for the minorities. “I made a commitment in Budget 2010-11 that we will bring banking services 73,000 villages. I have fulfilled that promise,” Pranab told reporters at the press meet.
On the growing concern over bad loans, the FM said banks are fully aware of the grave situation of non-performing assets and have already begun reducing their exposure to it. ” I have asked banks not to choke the flow of credit to the sectors where uninterrupted flow is required.” (curtsey : first post)
Rupesh Yatesh Dalal
Head Research Department
Head Research Department
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