India’s core industries, the economy’s lifeline, are slipping badly. February IIP data shows a decline in electricity output compared to the same month last year. Coal and gas shortages are partly to blame for this fall in power generation for the first time in several years - as reflected in IIP. This, along with the fact that mining output has contracted in 18 out of past 20 months leaves us with a key question – can we reverse industrial decline without rebuilding India’s core industries? The answer is clearly no, says Crisil Research
According to it; “For sustainable industrial revival, India needs to push infrastructure and industrial investments. The turnaround in the investment scenario critically depends on assured fuel availability. In addition, India needs to create a competitive business environment by solving issues related to procedural delays, to attract foreign direct investment as well as spur investments from Indian companies. These would, in turn, help create jobs, improve incomes, and raise household consumption. In 2013-14 normal monsoons, pre-election government spending and a marginal reduction in the lending rates could, at best, provide a temporary respite to consumption.”