In spite of industrial growth slipping to a nine-month low, Finance Minister P Chidambaram today said there were no signs of a slowdown in investment and that demand will bounce back during festival season, beginning this month.Commenting on the slowdown in July industrial growth, Chidambaram said: "The slowdown is disappointing. But there is no evidence of slowdown in investment. There is, however, evidence of slowdown in production in some sectors.""We will try to find out whether it is due to mild slowing down or whether they (industry) have cut back on production.Except for automobiles, there is no evidence of production cut back either," Chidambaram said, adding that the coming festival season could lead to demand picking up.The index of industrial production (IIP) growth in July was 7.1%, compared to 13.2% in July last year as consumer demand declined due to higher interest rates.Chidambaram was hopeful that an increase in consumption demand and higher capital expenditure during the year will result in higher industrial growth.Speaking on the sidelines of a function, Commerce Minister Kamal Nath today blamed contraction of credit for sharp decline in consumer durable demand. "Contraction of credit has achieved the desired result of lowering inflation. But it should not lead to decline in industrial growth," Nath said. "I am optimistic that the targetted manufacturing growth of 12% for 2007-08 will be achieved."
