The index of industrial production grew by 3.8 per cent in November, according to the figures released by the government on Monday. It is the highest growth rate during the last five months. What makes it all the more satisfying is that the previous month registered a 4.2 per cent drop in growth. The statistics suggest that the factory output figures showed revival, albeit mild, except in consumer goods and durables. The Modi government has reason to be satisfied, as the numbers show an improvement in the overall economic scenario, particularly in manufacturing and fresh investments. True, a 2 per cent growth rate is not something to write home about, though it marks an upturn.
The encouraging signs are the relatively consistent rate of growth over the last few months. If anything, it is a pointer to the fact that the country is on the right track as far as industrial production and investment are concerned. The main constraint for accelerating both remains infrastructure, which should receive the government’s urgent attention. Unless facilities like power and communication are provided, no manufacturer, whether domestic or foreign, would like to invest. They would go to places where those facilities are available. It may appear strange but it is true that many Indian companies have also set up units in other countries for not only logistic reasons but also for lack of infrastructure in India.
The Modi government has simplified environmental clearances, giving little scope for delays. This was one of the major bottlenecks investors faced in the country. There are many projects, involving thousands of crores of rupees, which have been pending for a long time. The simplification would have, hopefully, resulted in the clearance of many of them. The Centre and the states should work in concert to make India a favourite destination for investment.
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