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Steel, cement sectors show signs of revival

— PHOTO: PTI

TAKing stock: Prime Minister Manmohan Singh with Tata group Chairman Ratan Tata and Bharti Enterprises Chairman Sunil Bharti Mittal (right) at a meeting in New Delhi on Saturday.

NEW DELHI: Prime Minister Manmohan Singh on Saturday said certain sectors of the economy had showed signs of revival following the stimulus packages that were put in place by the Government to combat the slowdown.

“While we need to bear in mind that the time taken for these steps to take effect varies across measures and sectors, there are signs of improvement in sectors like steel and cement. The auto sector after a difficult patch seems to be showing signs of recovery… The rural demand for goods and services appears quite robust and the outlook in the agricultural sector gives room for optimism,” he said.

Putting the overall economic scenario in perspective, Dr. Singh, at a meeting with captains of industry here ahead of his departure for the G-20 Summit in London on April 2, said that while India was “decidedly better placed” than most countries in the world, there were uncertainties with regard to the global situation. In the event, he said: “To tackle a regime of low inflation and demand uncertainties across sub-sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserves responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline, and to act continuously to improve general sentiment are challenges that we confront as a nation… We must meet the challenge of job losses caused by the slowdown.”

Taking stock of the credit flow situation, Dr. Singh pointed to the Reserve Bank of India data as at the end of February 2009 which show that while the credit growth of public sector banks (PSBs) has been 23 per cent this fiscal as compared to 21.9 per cent in the same period of 2007-08, the credit growth of private and foreign banks has been one-third to one-fourth of what it was a year ago.

“While public sector banks have reduced the prime lending rates in the last three months between 150 and 200 basis points, other scheduled commercial banks are yet to respond in equal measure,” he said.

Participating in the discussions, Confederation of Indian Industry President Venu Srinivasan pointed out that while certain sectors were beginning to show some signs of recovery, others like manufacturing and small and medium enterprises (SMEs) “were in great pain”. Federation of Indian Chambers of Commerce and Industry President Harsh Pati Singhania noted that more stimulus packages would be required to boost growth while Associated Chambers of Commerce and Industry of India President Sajjan Jindal viewed that bank lending rates should be reduced immediately to spur the economy.

The Prime Minister also sought the views of corporate leaders on the stand that should be taken at the G-20 Summit. Industry captains pointed out that India must express its strong opposition to global protectionism and also highlight the issue of dumping by China.

Apart from the apex chamber chiefs, representing India Inc. in the interaction, among others, were Tata group chief Ratan Tata, Aditya Birla group Chairman Kumar Mangalam Birla, ICICI Bank Managing Director and CEO K. V. Kamath, Essar Group’s Shashi Ruia, R. P. Goenka (Goenka group), Adi Godrej (Godrej group), Sunil Kant Munjal (Hero group) and Baba Kalyani (Bharat Forge).

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