India Inc said on Monday double-digit growth in industrial production in August shows robust economic recovery but asked the government and the Reserve Bank of India [ Get Quote ] to continue the stimulus measures to sustain the uptrend.
Several fiscal and monetary incentives since December 2008 helped the industry to recover into a growth trajectory. The 10 per cent plus growth in manufacturing, basic goods, mining, electricity has been buoyed by these measures, Confederation of Indian Industry said.
"It is important to nurture this economic recovery by continuing with the current fiscal and monetary space which has been given, especially during a year of poor monsoons," CII director general Chandrajit Banerjee said.
Even though Reserve Bank of India is expected to maintain a status quo in its monetary policy at its upcoming review on October 27, the double digit industrial growth will give it some comfort to tackle inflationary pressures later.
"CII hopes the RBI would give the welcome signal of an accommodative monetary policy...," Banerjee said.
In August, factory output grew by 10.4 per cent on the back of double-digit growth in mining, manufacturing and electricity sectors. Industry production had expanded by 1.7 per cent in the same month last year.
Assocham said that the figures are clearly reflecting that the recovery is becoming much more pronounced and visible to enable India embark on the growth path it intends to achieve in the current fiscal.
"IIP rising to 10.4 per cent only suggests resumption of recovery in the Indian economy . . .," Associated Chambers of Commerce and Industry of India secretary general D S Rawat said.
PHD Chamber of Commerce and Industry also said, "Such a rebound is a harbinger for better times ahead as it indicates a pick up in demand which is likely to gather momentum in the coming months."
The growth in capital and intermediate goods sector have signalled that fresh investment is picking up and industry is on the rebound, it said.