Anil Sasi

New Delhi, April 5 The Government has zeroed in on 10 key industrial groups responsible for the sharp dip in the industrial production estimates for 2007-08.

With cotton textiles, textile products, paper, basic metals and non-metallic minerals, metal products, machinery and transport equipment figuring in the list of laggard industries drawn up by the Government, corrective action focussed on these sectors could be on the cards to stem any downturn in the overall industrial growth.

The data, commissioned by the Government in a fire fighting effort after the IIP numbers took a tumble during the April 2007 to January 2008 period, show a substantive downturn in case of cotton textiles, textile products and the wool, silk and man-made fibre textiles category.

“Around 50 per cent of the country’s total textile output worth around $35 billion is on account of exports. With textile and garment exports showing a clear deceleration, there has been a ripple effect on domestic manufacturing activity in the sector as a whole,” a Confederation of Indian Textile Industry (CITI) official said.

Under the capital goods segment, which recorded a noticeable drop in output in the latest reported IIP data, the machinery and equipment category and the transport equipment segment exhibited a big slide. Paper products, rubber, plastic, petroleum and coal products, non-metallic minerals, basic metals and alloys industries, and metal products and parts also figure in the list of industry segments showing a slowdown.

A combination of factors, including the high interest rate regime, the effect of the appreciating rupee on export production, and the high base levels of the past year, are being attributed among reasons for the deceleration in these sectors.

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