67管理学英文版chapter09

IndustryIndustry,especiallymanufacturing,wasoneofthekeydriversofthetransformationinthegrowthtrajectoryoftheIndianeconomywitnessedduringthepost-2000period.However,acyclicalslowdownbeganintheindustrialsectorin2007-08andwascompoundedbythetwinglobalshocksin2008-09.Theeffectslingeredonbrieflyinthecurrentfiscal,butgrowthreboundisnowamplyevident.Grossdomesticproduct(GDP)growthhasclearlyrevivedinthesecondquarterofthecurrentyearandtheindustrialsectorhasemergedasoneoftheprimemoversoftheprocess.9.2Therecoveryintheindustrialsectorisclearlydiscernibleascorroboratedbyboththedataonnationalaccountsandtheindexofindustrialproduction(IIP).ThedownwardtrendobservedintherateofgrowthoftheIIPthatspannedalmosteightquarters(beginningthefirstquarterof2007-08andcontinuingthroughtothelastquarterof2008-09)standsreversedasgleanedfromthelatestdataforthecurrentfiscal.Afterreachingatroughof0.6percentduringthesecondhalfof2008-09,growthintheIIPrevivedtoalevelof7.7percentduringApril-November2009-10.9.3Thebroad-basednatureoftherecoverywasevidentinthepick-upingrowthofalmostallmajorcomponentsoftheIIP(Table9.1).WiththeexceptionCHAPTER9Table9.1:GrowthintheIIPanditsmajorcomponents(percent)PeriodMiningManufacturingElectricityIIP2006-075.412.57.211.6Q12007-082.711.18.310.3Q22007-087.48.97.18.7Q32007-085.58.94.68.3Q42007-085.27.35.57.0Q12008-094.05.82.05.3Q22008-093.84.93.24.7Q32008-092.00.52.90.8Q42008-090.90.33.00.5Q12009-106.83.46.03.8Q22009-109.09.37.59.1Oct-Nov.099.511.94.011.0Source:CentralStatisticalOrganisation(CSO).209Industry0MiningPercentGrowth(percent)intheIIPanditsmajorcomponents5101520GrowthinApr-Nov08-5Figure9.125GrowthinApr-Nov093.44.22.83.68.4-0.75.17.34.18.37.76.16.17.011.41.17.621.7ManufacturingElectricityBasicgoodsCapitalgoodsIntermediatesDurablesNon-durablesIIPofconsumernon-durables,whilealltheuse-basedindustrialgroupssubsumedundertheIIPhaverecoveredfromslump,itwastheconsistentlyincreasinggrowthinconsumerdurablesandintermediategoodsthatdrovetheindustrialrevival(Figure9.1).9.4Thecontinuingdownwardmovementincapitalgoodsandconsumernon-durables,andtoanextentbasicgoods,suggeststhattheircurrentrateofgrowthissignificantlybelowthepre-2007-08levelsandthatfullerrecoveryrequiresabroaderanchor(Figure9.2).PercentYearGrowthinIIPanditsuse-basedcategories(inpercent):Basicgoods024681012Figure9.2AGrowthinbasicgoodsTrendline2006-072007-082008-092009-10Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Oct-NovPercentYearGrowthinIIPanditsuse-basedcategories(inpercent):Capitalgoods051015202530Figure9.2BGrowthincapitalgoodsTrendline2006-072007-082008-092009-10Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Oct-Nov210EconomicSurvey2009-10PercentGrowthinIIPanditsuse-basedcategories(inpercent):Intermediategoods05101520-10-5Figure9.2CGrowthinintermediategoodsTrendlineYear2006-072007-082008-092009-10Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Oct-NovPercentYearGrowthinIIPanditsuse-basedcategories(inpercent):DurablesFigure9.2D051015202530GrowthindurablesTrendline2006-072007-082008-092009-10-5-10Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Oct-NovPercentYearGrowthinIIPanditsuse-basedcategories(inpercent):Non-durablesFigure9.2EGrowthinnon-durablesTrendline2006-072007-082008-092009-1005101520-10-5Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Oct-NovPercentYearGrowthinIIPanditsuse-basedcategories(inpercent):IIPFigure9.2FGrowthinIIPTrendline2006-072007-082008-092009-1002468101214Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Oct-Nov211IndustryDEVELOPMENTSTHATIMPACTEDTHESLOWDOWNANDRECOVERYTheslowdown9.5AbriefrecapoftheprocessofslowdownintheIIPsince2007-08wouldbeusefulinappreciatingthecurrentprocessofrecovery.Thedeclineinindustrialgrowth,asmeasuredbytheIIP,startedinthefirstquarterof2007-08andcontinuedthroughthefirsthalfof2008-09atagradualpace.PersistentriseinthepriceofcrudeduringJanuary2006-July2008andtheriseinpriceofotherintermediates(globalcommoditypriceshock),particularlymetalsandores,fromthelatterhalfof2006-07tothesecondhalfof2008-09,hadtheireffectonthecostsideofthemanufacturingsector.Acomparisonofthemajorcomponentsofexpenditureforasampleofmanufacturingcompaniessuggeststhatevenbythesecondhalfof2007-08,thecoststructurehadworsened.Thisgotaccentuatedinthefirsttwoquartersof2008-09(Table9.2).9.6Thedeepeningoftheglobalfinancialcrisisimmediatelyfollowingthecommoditypriceshockmadeitincreasinglydifficultforcompaniestoraiseresourcesin2008-09.Ontheexternalfront,therewasasharpdeclineintheflowoffundsfromAmerican/globaldepositoryreceipts(ADRs/GDRs)andexternalcommercialborrowings;buttheinflowsofforeigndirectinvestment(FDI)continued.Domestically,themobilizationofresourcesbytheprivatesectorthroughthecapitalmarket,especiallytheequityroute,sawaprecipitousdeclineduring2008-09.However,bankcredittotheindustrialsectorrecordedimpressivegrowthduring2008-09andinsomewaysfilledthegapduetothesuddenshrinkageofothersources.9.7Thedryingupoftradecredit,especiallyofforeignbanks,sincemid-September2008andthesharpdepreciationinthenominalexchangerateoftherupeewithinashortspanoftimemadeitdifficultformanufacturerstohedgetheirpositionsandfinancetheirongoingoperations.TheshrinkageinexportdemandthatstartedfromSeptem