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10 per cent growth forecast in auto, textiles

Special Correspondent

"Robust growth" of IT, Chemical and fertilizer industry in State


  • "Non-implementation of VAT affecting competitiveness
  • The cement industry managed only "marginal growth"
  • Tamil Nadu among the top industrialised States

    CHENNAI: The Confederation of Indian Industry's (CII) Business outlook survey for April-September 2005 has shown a "robust growth" of the IT, Chemical and fertilizer industry in Tamil Nadu.

    It projects a 10 per cent growth in automotive, auto components and textile industry for the period October 2005 to March 2006.

    A CII release said "non-implementation of Value Added Tax in the State is affecting the competitiveness of most of the sectors that have been surveyed."

    The top five sectors surveyed in Tamil Nadu were automotive and auto components, IT, textile, cement and chemicals and fertilizers.

    Buoyant demand

    The IT industry posted a 40 per cent growth in revenues during the first half of the year, compared to the corresponding period last year.

    The industry expected this growth to be between 30 and 40 per cent for the second half-year. "Owing to buoyant demand, the industry is expected to increase headcount by 30 per cent in the next half of the current fiscal. Employee attrition rate, slow communication network, road infrastructure and visa restriction for onsite work in the U.S. are some of the bottlenecks faced by the industry," the CII release noted.

    It said the chemicals and fertilizer industry posted a 15 per cent growth in sales production in the first half year and was looking at a profit margin to the extent of 16 to 20 per cent for the second half.

    The automotive and auto components industry reported a 10 per cent growth in terms of production, sales and exports in view of strong domestic growth and rising exports. The industry was expecting a 10 per cent growth in demand for the second half-year.

    The textiles industry also posted a robust 10 per cent growth in sales and exports due to increased demand.

    It expected similar growth in the next six months. Shortage of trained manpower and poor waste disposal facilities were some of the concerns of this sector.

    The cement industry managed only "marginal growth" and was expecting to perform better in the next half-year, thanks to the major on-going infrastructure and tsunami reconstuction works.

    Top industrialised State

    CII said "Tamil Nadu is among the top industrialised States in the county. It has become a preferred destination for automotive companies, with 21 per cent share in passenger cars, 33 per cent in commercial vehicles and 35 per cent in automobile components produced in India." Textiles have been the growth engine, with 11.64 lakh handloom weavers and accounting for one-fourth of the total 16.66 lakh power looms in the country. Tirupur accounts for 56 per cent of total knitwear production in India.

    The State accounts for 10 per cent of the cement production in India and ranked second in IT exports.

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