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Economic Survey: Industrial sector to grow by 11.8 pc this fiscal

According to the Survey, the growth of the industrial sector, in the first half of 2021-22, which was 22.9 percent as compared to the corresponding period of 2020-21, is expected to grow by 11.8 percent in this financial year.

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Mumbai: Despite the challenges posed by the Covid-19 pandemic, the industrial sector is expected to grow by 11.8 per cent in this fiscal year, owing to the continued policy support towards industries by the government, the Economic Survey, tabled by Finance Minister Nirmala Sitharaman on Monday, said.

According to the Survey, the growth of the industrial sector, in the first half of 2021-22, which was 22.9 percent as compared to the corresponding period of 2020-21, is expected to grow by 11.8 percent in this financial year.

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“The Indian industry experienced interlude in business activity leading to slowdown in its performance. With the gradual unlocking of the country coupled with supportive policy initiatives which included easing of supply side bottlenecks through easier access to credit especially, emergency credit line guarantee scheme to MSMEs, relief to the real estate sector, production-linked incentives for 14 champion sectors and other direct tax measures, the industrial growth started to recover,” the Survey said.

The Survey noted that record vaccinations as well as improvement in consumer demand and business confidence have had a positive impact on the performance of the industrial sector.

“This period also saw a boost to digital infrastructure, structural reforms in telecommunications and big-ticket disinvestment in Air India. The pace of this recovery and further growth is likely to continue due to consistent efforts of the government to bring in various structural, fiscal and infrastructural reforms in addition to a slew of measures/ schemes like the production linked incentive scheme (PLI) to support industries,” it said.

The share of the industrial sector in the nominal gross value addition at current prices was 25.9 per cent in 2020-21, it added. The survey said, “With the industrial sector recovering and expected to grow at 11.8 percent, as per advance estimates for 2021-22 by the National Statistical Office, industry’s share is expected to increase to 28.2 per cent,” it said.

“In 2020-21, the share of manufacturing fell to 14.4 per cent, but is expected to improve to 15.3 per cent in 2021-22. On the other hand, the electricity, gas, water supply and other utility services was the only sub sector that had experienced a positive growth of 1.9 per cent.

“In 2021-22, the manufacturing sector is expected to grow by 12.5 per cent, mining and quarrying by 14.3 percent, construction by 10.7 percent and electricity, gas and water supply by 8.5 per cent. This improvement is on the back of industrial contraction in the corresponding period of the last financial year,” it added. 

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