The 9.2 per cent growth achieved during April to November 2007 by the industrial sector, when seen against the backdrop of the robust growth during the preceding four years suggests that the buoyancy in this sector has continued, though with a degree of moderation, notes the Economic Survey.

The first eight months of the current fiscal witnessed a moderate slowdown in the growth of the industrial sector, which has mainly been on account of the manufacturing sector. The mining and quarrying sector grew at a faster pace, while the growth in electricity remained unchanged from April-November 2006.

The survey highlights the two important changes that have occurred in the growth pattern of the use-based industrial categories during April-November 2007 compared to the corresponding period of 2006. First, capital goods have grown at an accelerated pace over a high base attained in the previous years which augurs well for the required industrial capacity addition. Second, the consumer durables basket that forms part of the index of industrial production showed negative growth during the period.

Interestingly, the survey points out that while one segment of automobiles - commercial vehicles, jeeps and passenger cars - catalysed manufacturing growth, the slump in the production of two-wheelers dampened it. Items like insulated cables / wires, telecom cables, etc, wood products, sugar computer systems and their peripherals, and scientific equipment drove growth with their outstanding production performance. Major dampeners of manufacturing growth were telephone instruments, cine film, X-rays, photo-roll films other than motorcycles and scooters.
 
Measures to sustain and raise industrial growth
The Economic Survey 2007-08 has said that the real challenge before the country lies in strengthening the foundations of sustained industrial growth. One of the biggest challenges to sustaining and stepping up industrial growth lies in removing the infrastructural impediments in road - both rural and urban - rail, air and sea transport and power.

The Survey has pointed out that growth in infrastructure not only alleviates the supply side constraints in industrial production, but also stimulates additional domestic demand required for industrial growth. Another issue in industrial growth is the swiftness and efficacy with which the skill deficit felt in many areas of manufacturing is bridged. This will facilitate research and development and technological innovations, which are urgently called for in important industries like chemicals, automotives and pharmaceuticals.

The Economic Survey has also pointed to the imperative need to facilitate the growth of labour intensive industries, especially by reviewing labour laws and labour market regulations. This is particularly important in reversing the current not-so-encouraging manufacturing employment trends. Besides, the growth in many industries is constrained by the acute scarcity/depleting reserves of important raw materials like coal, iron ore, natural gas and forest resources. The Survey feels that sectorally differentiated initiatives may be required for skill upgradation, supply augmentation of inputs and promotion of research and development.