MINISTER OF STATE FOR COMMERCE & INDUSTRY(DR. S. JAGATHRAKSHAKAN)
(a) & (b): No separate study has been conducted on the impact of rising prices and
hardening of interest rates on the industrial growth. However, rising prices or hardening
of interest rates have a bearing on industrial growth. While rising prices is likely to
increase manufacturing cost and also reduce domestic demand, hardening of interest rates
increases cost of capital for the industry.
Government has already taken confidence building measures for improving the industrial
climate and manufacturing in the country. One of the measures taken by the Government
is the announcement of the National Manufacturing Policy (NMP) with the objective of
enhancing the share of manufacturing in GDP to 25 percent and creating 100 million jobs
over a decade or so. The Policy also seeks to put in place measures to improve industrial
infrastructure including setting up of National Investment and Manufacturing Zones (NIMZs),
simplify business regulation and incentivize clean technology; skill development; and
investment in Micro, Small and Medium Enterprises (MSME).
The Delhi Mumbai Industrial Corridor (DMIC) Project is under implementation to create a
strong economic base with globally competitive environment and state-of-the-art
infrastructure along the Delhi-Mumbai Dedicated Freight Corridor of the Railways.
Other measures include promotion and facilitation of industrial investment including
promotion of Foreign Direct Investment (FDI) through consolidation of various press notes
into a single document; gradual liberalization and rationalization of FDI Policy; regular
meetings with industry associations and stakeholders to fast track implementation of
industrial projects etc.
(c) & (d): A Government-Industry Joint Task Force (JTF) has been constituted under
the chairmanship of Hon’ble Minister of Commerce Industry and Textiles to serve as an
institutional mechanism for regular dialogue between industry and Government in order to
facilitate the growth and development of Indian Industry with a view to achieving the
overall objectives of sustained and inclusive economic growth. So far four meetings of
the JTF have been held.
Based on the recommendations of the JTF Government has already initiated measures like
resolving the issues related with land acquisition and environmental clearances, fast
track implementation of projects, identification of ten National Investment and
Manufacturing Zones (NIMZs) as part of National Manufacturing Policy (NMP), gradual
liberalization& rationalization of FDI policy in various sectors etc.
(e) & (f):The growth of Eight Core Industries viz. Coal, Crude Oil, Natural Gas, Petroleum
Refinery products, Fertilizers, Steel and Electricity, having a weightage of 37.9 percent
in the overall Index of Industrial Production (IIP) do have some impact on the growth of
manufacturing industry. Similarly, rise in prices can adversely affect industrial growth
in terms of increase in the cost of production and reduction of domestic demand. However, no one to one correlation can be established between the growth of Core Industries and price rise and growth of manufacturing industry or its competitiveness in the international market.
The details regarding the growth rate of manufacturing and core industries are given in the
table below:
Table: Growth rate of Index of Industrial Production (IIP), manufacturing sector and Core
Industries (In percent)
Period Manufacturing$ Overall IIP$ Growth of Eight Core Industries$$
2009-10 4.8 5.3 6.6
2010-11 9.0 8.2 6.6
2011-12 3.0 2.9 4.4
2012-13
April -1.8 -1.3 3.1
May 2.6 2.5 4.0
June -3.2 -2.0 3.8
July -0.4 -0.2 1.2
August 2.4 2.3 2.4
September -1.5 -0.4 5.0
October - - 6.5
Source: $ Central Statistics Office
$$ Office of the Economic Adviser, DIPP
Besides measures taken for improving the industrial climate and manufacturing in the
country as indicated in parts (a) & (b) above, so far as core industries are concerned,
Government is encouraging participation of private sector, including foreign companies,
for exploration and production of petroleum and natural gas and related activities that
are capital intensive and requiring use of expensive state-of-art technology in order to
step up production of oil & gas.
In order to increase the production of Metallic Minerals (Iron ore, Manganese, Chromites),
the Government has sought to create an attractive environment for investment by
legislative reforms in the form of Mines & Minerals (Development & Regulation) Bill,
2011, quarterly review of pending cases of Environment & Forest clearances etc.
