'Formation of stable coalition government augurs well for economy'

NEW DELHI: The formation of a strong and stable coalition government at the Centre augurs well for India's economy, as it is likely to initiate much-needed reforms, galvanise investors and spur economic growth, Assocham today said.

"A strong and stable coalition would enable the new government to announce single-minded reform pursuing policies to de-bottleneck supply concerns, boost infrastructure investment, revive investment climate and thereby inject growth in the economy," Assocham President Rana Kapoor said.

Besides, commenting on the industrial output data released yesterday, Kapoor said: "IIP in negative territory for the fifth month in past six months continues to indicate prolonged weakness in demand conditions."

Output as measured by the index of industrial production (IIP) remained almost flat in 2013-14 and declined 0.1 per cent, compared with an expansion of 1.1 per cent in 2012-13.

The IIP contracted 0.5 per cent in March due to declining output in manufacturing, especially capital goods.