20.2.09

Key industries show signs of turnaround

In what will be music to the UPA government’s ears just ahead of the forthcoming electoral race, the two stimulus packages it has devised seem to have begun to show results, with an upturn in key sectors like steel, cement, autos, food and beverages and railway freight. Cabinet secretary K M Chandrashekhar said that strong rural demand seemed to be shoring up the economy. “I think we are seeing the first clear signs of a turnaround. The spending on flagship and infrastructure programmes and steady hikes in MSPs for wheat and rice seem to have kept the economy afloat, driving demand,’’ he said. The data now flowing in is easing some of the worry lines in government as the negative trends are not only levelling out, but the graph has begun to inch upwards again. These are still early days, but the government hopes that with adequate follow-up steps, especially in states that are key to the revival recipe, the trend will hold and strengthen. The data shows that the cement sector has grown 9.97% in December 2008 as compared to November and that the year on year increase is 11%. Steel, which had declined steadily through September, October and November last year, has shown a recovery in December 2008 and January 2009 and has now touched the May 2008 figure of 22.86 metric tonnes when the sectoral growth rate was 4.1%. Although the steel sector has been slow, its climb-back to positive figures is seen as reason for cheer. Cement and steel are viewed as key drivers with the construction sector seen to have a significant impact on growth sentiment.

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