High inflation, input cost hitting manufacturing growth:Survey

NEW DELHI: High inflation and input cost are inhibiting manufacturing sector growth, even as performance of the segment, contributing over 80 per cent in industrial output, improved in the first half of 2010-11 over the same period last year, a CII ASCON survey said.

There are sectors, which have recovered sharply and grow at over 20 per cent while some have remained in the moderate growth range of 0-10 per cent during April-September, 2010-11 over the same period last year, it said.

"Soaring inflation, rising input cost and slow growth in capacity addition are some of the reasons that are inhibiting growth in specific sectors," CII Director General Chandrajit Banerjee said.

Out of 127 sectors covered by the survey, 43 sectors, including aluminium, natural gas and vehicle industry have registered an excellent growth rate of more than 20 per cent in April- September, 2010 compared to 14 sectors in the same period last year.

"For the recovery to become more broad-based, some of these issues (high inflation, raw material costs, etc) need to be addressed," Banerjee added.

Sectors registering high growth rate, however have decreased from 30 last year to 22 sectors in the first half of the fiscal. Sectors reporting high growth rate include, crude oil, power cables and consumer non-durables like cigarettes and home and personal care.

The survey further said sectors recording moderate growth of 0-10 per cent during the period include, cement, edible oils, fertiliser, and electricity.

Inflation was 8.58 per cent in October against 8.62 per cent in the previous month.