Industrial Policy – Group 4

 Balvinder - New Industrial policy

1991, Growth upto 1994-95
 Mr.Yashwant – 1995-96 to 1999-2000
 Ms.Preethi – 2000-01 to 2004-05
 Ms.Reetu – 2005-06 to 2009
 Growth Rates

Sectoral Industrial Growth

Index of Industrial Production – Growth Rate (%)
Base 1993-94=100
Period Mining & Manufacturing Electricit Overal
Quarryin y l
g
Weight (10.47) (79.36) (10.17) 100
s
2000-01 4.4 5.9 4.8 5.8
2000-01 Industry Overview
 Industrial growth 5 % vs 6.7
 Slow down- Domestic
 High Interest rate due to high fiscal
deficit
 Acceleration- Consumer Durables
 Deceleration - Capital & Intermediate
goods , what it meant
 2000-01 Outlook & Decision
Indian Industry – Efficient & Competitive
 Rationalise Excise Duty
 Removal Corporate tax Surcharge
 Removal Income tax Surcharge
 Reduction Interest Rates
 Opening FDI Further – b to b ecommerce, Oil Refining,SEZ,
Telecom [cond], Insurance 26%,
 FDI Proposal Time Reduced
 Cap removed on Investment in Power Sector
 Off Venture Capital – Domestic Venture capital Undertaking –
SEBI Regulator
 Reduction in Bureaucratic control
 Infrastructure Constraint
 Telecommunication , Transport
 Capital availability – Competitive rate
 Growth Rates
Sectoral Industrial Growth
Index of Industrial Production – Growth Rate (%)
Base 1993-94=100
Period Mining & Manufacturing Electricity Overall
Quarrying
Weights (10.47) (79.36) (10.17) 100

2001-02 1.2 2.9 3.1 2.7

USE BASED CLASSIFICATION 2001-02

 2001-02- Industry Overview

 IIP growth 2.7%

 Structural & Cyclical factors
 Capital Goods Negative Factors
 USA Sept 11 attack
 2001-02 Policy decision
 Introduction of Competition Law Bill August 6, 2001
 Implementation of Nhd Project.
 Implementation of Telecommunication Policy by opening of
DLD Telephony
 Amendment in Companies act 1956
 Abolition of Sick Industrial Companies Act bill [SICA] Aug
30’2001
 Conversion of Cooperatives into Companies
• Companies Ordinance 2001 100%FDI- B to B commerce,
Pharma, hotel, Sez [Some exceptions]Manufacturing
• Defence opened
• Single rate Excise – CENVAT 16%
• Rules of Central excise reduced
• Peak Duty of Custom reduced
• Interest rate reduced
• Implementation of Privatation
 2002-03 IIP Growth
2002-03 Industrial Growth

Index of Industrial Production – Growth Rate (%)

Base 1993-94=100
Period Mining & Manufacturing Electricity Overall
Quarrying
Weights 10.47 79.36 10.17 100

2002-03 5.8 6 3.2 5.7

 2002-03 Overview & Outlook
 IIP Growth 5.7%
 Revival of Capital goods 10.5%
 Textile Industry turnaround 14.8% growth against 2.5% IN 01-02
 Capital & Consumer non durables sharp growth
OUTLOOK 2002-03
 Improvement in Infrastructure
 Improvement in Exports
 Low & uniform custom tariffs
 Move to VAT
 Labour laws reform
 Frame work for failure & winding up of companies
 Recovery of US and EU Mkts after Sep 11,2001 attack
 2003-04 IIP Growth
2002-03 Industrial Growth

Index of Industrial Production – Growth Rate (%)

Base 1993-94=100
Period Mining & Manufacturing Electricity Overall
Quarrying

Weights 10.47 79.36 10.17 100

2003-04 5.2 7.4 5.1 7

 2003-04 Overview
 IIP Growth 6.9%
 Mfg took away 80% with growth 7.2%
 Fall in Consumer Non durable
 12 out of 17 Industry group +growth
 Key Industry like Steel & Cement grew to 6.9% and 6.1 resp.,
 5 Policy Problem inhibiting growth
 Comparision with China

OUTLOOK 2003-04
 External Liberalisation Peak duty down 20%
 Elimination of SAD 4%
 Duty cuts on Power Transmission & Project 25% to 10%
 Electrical Components or Optical Fiber cables from 15% / 5% to
5% / Nil
 2004-05 Overview
 IIP 8.4% - Lot of up and down
 Higher IIP after 1995-96
 Capital Goods Grew 13.3% [inv act]
 Consumer Goods Grew [ low int]
 Agriculture negative Growth 1.1%
 Policy Initiatives for SSI
 Initiatives for SSI
 Critical Drivers-Low Interest rate, Infrastructure Development
 Need to Improve Coordination between State & Center
 Removal of constraint for Bright Industrial sector
 Summary 00 - 05
Sectoral Industrial Growth
Index of Industrial Production – Growth
 00-01 & 01-02 was
Rate (%)
Base 1993-94=100
marked with slow
Period Mining Manufa Electr Overa down
& cturing icity ll
Quarryi
ng
 2002-03 started
Weight 10.47 79.36 (10.17 (100) with consolidation
s )
2000- 4.4 5.9 4.8 5.8  2003-04 kept the
01
2001- 1.2 2.9 3.1 2.7 Buoyancy
02
2002- 5.8 6 3.2 5.7  2004-05 saw a
03
2003- 5.2 7.4 5.1 7
Growth after 1995-
04
2004- 4.4 9.2 5.2 8.4
96
05
 Growth –Use Based
Classification 2000 to 2005
Growth rates of Industrial Production by Use based Classification

Sectors Weight 99- 00 00- 01 01-02 02-03 03-04 04-05

Basic Goods  35.57 5.5 3.7 2.6 4.9 5.4 5.5
Capital Goods  9.30 6.9 1.8 -3.4 10.5 13.6 13.9
Intermediate
Goods  26.50 8.8 4.7 1.5 3.9 6.4 6.1

Consumer Goods  28.70 5.7 8 6 7.1 7.1 11.7

1. Consumer
Durable  5.40 14.1 14.5 11.5 -6.3 11.6 14.4

2. Consumer Non
Durable  23.30 3.2 5.8 4.1 12 5.8 10.8
IIP[Index of
Industrial
Production  100 6.7 5 2.7 5.7 7 8.4