CPI(M) MP Rupchand Pal, chairman of the Parliamentary Committee on Public Undertakings, told Business Standard that the core sectors of the economy were facing slowdown. "This is a matter of serious concern for us. The slowdown of the core sector coupled by inflation will have a menacing effect on the economy. Agriculture was in doldrums in any case and now the industrial sector is facing crisis," he said.
"We have been opposing this growth theory of the government for many reasons. Recent growth is mainly propelled by the service sector. But the service sector can't grow in a standalone manner. The government should take effective measures to check inflation," he said. "Steel and cement prices, which form the main components of the core sector, have witnessed a huge price rise.
This has led to shrinking of margins in the manufacturing sector. At the same, credit has become costly. Industry is facing this two-pronged attack," he added.
The BJP called the drop in industrial production a result of lack of any real policy reforms. It said the drop could mean the end of the growth story.
"The crisis is deeper than meets the eye. There is an immediate need for decision-makers to effect policy changes," said BJP spokesperson Prakash Javadekar. "Sector by sector we are seeing a slowing down of growth, with the government doing little other than sloganeering and taking ad hoc measures," said Javadekar.
"Already, agricultural growth is slow, averaging 2 per cent, and with industrial growth down to 3 per cent, reflecting the lopsided growth promoted by the government, we want to know what the government is doing to address this," he said.
"Real reforms are being impeded. The government needs to allow industry to push ahead with reforms," he added.
