No doom, just boom, assures FM

NEW DELHI: Finance minister P Chidambaram on Thursday said the slowdown in industrial production in July was disappointing but hoped the demand would pick up in the upcoming festive season. He said much should not be read into the figures at this stage as there had been no slackening in investment. “I am confident that demand and investment boom will continue, there is latent demand,” he said, adding the outlook for the entire year remained positive.

The finance minister pointed out that just a handful of sectors had fared badly during the month and the finance ministry had started the exercise of meeting people from the sectors to identify the problems. “We have called two-three businessmen in the affected sectors to meet officials to find out the problems. We will go about identifying problems sectorally,” he told media after a Cabinet briefing.

As per the government data released on Wednesday, the country’s industrial output growth slowed to 7.1% in July 2007 from 13.2% in July 2006.According to commerce & industry minister Kamal Nath, while the contraction of credit was important to check inflation, it should not be allowed to hamper industrial growth.

Mr Chidambaram said the sectors that experienced sharp slowdown in April-July 2007 compared to the previous fiscal include beverages & tobacco, paper, chemicals & petrochemicals, non-metallic minerals and transport & equipment. Sectors where the decline has been smaller are cotton textile and textile products.

However, the minister pointed out there are sectors where growth has remained unchanged, or actually increased, in the period such as food products, jute, wood products, leather products, rubber, petroleum, basic metals and machinery & equipment.