Reforms to continue on back of better factory output: FinMin

Tribune News Service

New Delhi, October 13

Buoyed by industrial production numbers at a 3-year high, the Finance Ministry today said reform measures would continue in order to boost economic activity.

“Improved IIP numbers are encouraging. Reform measures will continue. GST and Bankruptcy law are on top of reform agenda,” Economic Affairs Secretary Shaktikanta Das tweeted.

Industrial output rose to nearly three-year high of 6.4% in August on improvement in manufacturing and capital goods.

Factory output, measured in terms of the Index of Industrial Production (IIP), was at 4.1% in the April-August period against 3% in the year-ago period.

While the GST Bill is pending in Parliament, the government, however, is going ahead with the preparatory work necessary for smooth implementation of the GST, which will subsume various levies like excise, service tax, sales tax, octroi, etc, and will ensure a single indirect tax regime for the entire country.

In a bid to improve the ease of doing business environment in the country, Finance Minister Arun Jaitley had in Budget said the government will unveil a comprehensive Bankruptcy Code in the current fiscal.

The draft of bankruptcy law is almost complete and would be soon taken up in Parliament for approval.

Commenting on the industrial production numbers, Crisil Research said industrial production growth jumped up to 6.4% in August — the highest in 36 months, in part due to a favourable base.

However, the month-on-month also recorded strong momentum. IIP growth was driven by stronger manufacturing growth (at 6.9%) in August. It said another bright spot came from the rise in consumer goods sub-index which was led by growth in consumer durables.

Crisil said these numbers signalled that the recovery in consumption is starting to pick up pace. However, this uptick remains patchy with positive indicators for urban demand (such as auto sales) while rural demand continues to be weak. Unseasonal rains early this year and the weak monsoon have been telling on rural demand, it added.