Leading industry chamber Ficci today said withdrawal of the stimulus packages given to cushion the economy from the impact of the global meltdown, will impact industrial growth that has positively responded to these fiscal incentives.
"The pattern of growth seen in the sub-sectors of the industry indicates the positive response of the entire industrial sector to the stimulus measures. And a sudden withdrawal of stimulus will surely break this growth spell and should certainly be avoided," Ficci president Harsh Pati Singhania said here today.
The index of industrial production (IIP) for November zoomed 11.7 per cent compared to the dismal 2.5 per cent in the year-ago period--the highest factory output in 25 months.
While the consumer durables sector logged in a historic 37.3 per cent growth in November, the intermediate and capital goods sub-sectors grew 19.4 per cent and 12.2 per cent, respectively.
Singhania said it is important that these growth impulses are strengthened through appropriate policy support.
Commerce and Industry Minister Anand Sharma termed the IIP figures as "good news" and said the growth is sustainable.
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Sharma also announced a slew of export incentives amounting to Rs 400-500 crore to select export sectors.
These new export sops come at a time when the Finance Ministry has opined against fresh stimulus and is likely to focus on curbing fiscal deficit in the FY11 Budget.
Meanwhile, an Assocham survey said India Inc foresees that GDP growth would not surpass 7.5 per cent this fiscal due to shortfall in agricultural output.