Industrial growth rate in India has been decreasing for last two months. In March the industrial growth – index of industrial production (IIP) was decreased to 2.4 percent against 8.5 recorded in March 2008.
The global financial crisis is the major reason in India for the decline in the IIP. The growth recorded in the month of March this year is said to be lowest in last sixteen years. There is impact of the global financial crisis on Indian industries and their output.
In 2008, the IIP drastically fell to a negative growth in December and there was fall recorded in the manufacturing, consumable durables and intermediates goods. This year also there was 3.3 percent fall in the manufacturing sector’s output, which accounts for nearly 80 percent in the index of IIP in India.
The government has been taking measures the check the impact of the global financial crisis on industries. The marginal growth of the industrial output is a concern for the economy.
The Chairman of the Prime Minister’s Economic Advisory Council (PMEAC), Suresh Tendulkar, said to media that recovery was would be slow but the economy would bail out from soon. International financial marketing has been recovering slowly from the impact of the global financial crisis and this will have impact on the Indian economy and market.
The dismal growth of the IIP is a big challenge for the forthcoming government to deal with. The election will over soon and the new government will have responsibility to bring stability to the economy. The stimulus packages were declared to pump extra money into the system by the Government of India and Reserve Bank of India.
The new government in India will face economic challenges like – inflation, dismal growth of IIP, liquidity crisis, etc. Interestingly, the new government of India after election need to tackle those entire economic epidemics amidst global financial crisis.
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