The Indian economy witnessed a moderate improvement in growth trends in terms of production during the first quarter ending June over the corresponding quarter a year ago, industry chamber CII said on Sunday citing its joint survey conducted with ASCON.
The Confederation of Indian Industry (CII)-ASCON survey tracking the performance of 70 sectors in the April-June quarter said domestic demand and investment will be supported by better consumption patterns due to the favourable monsoon, moderation in inflation and the onset of the festive season, a statement said.
"The ASCON Q1 FY19 Survey results reflect steady progress in economic growth. What is especially significant is that there has been a perceptible increase in the share of sectors recording higher growth," CII Director General Chandrajit said.
Fewer sectors are anticipating negative growth trends, which clearly points towards improvement in the economic environment, he said.
The survey classifies growth trends across four broad categories - Excellent (over 20 per cent), High (10-20 per cent), Moderate (0-10 per cent) and Low (below 0 per cent), the statement said.
"While the growth trends remain concentrated in the 'moderate' category, a deceleration in the pace of de-growth suggests firming of the recovery in the economy," it said.
The survey showed a sharp increase in the sectors witnessing 'excellent' growth during April-June 2018, over the same period a year ago, with the share of such sectors improving to 14.3 per cent in the first quarter, from 5.7 per cent earlier.
The share of sectors recording 'high' and 'moderate‘ growth improved marginally during the quarter in review, while the share of sectors witnessing 'low' growth (below) has come down substantially.
While the share of sectors registering 'high' growth improved to 21.4 per cent in the first quarter, from 20 per cent last year, sectors witnessing 'moderate' (0-10 per cent) growth improved to 44.3 per cent from 42.9 per cent earlier.
The share of sectors witnessing 'low' growth has come down substantially to 20 per cent as compared to 31.4 per cent recorded earlier.
Sectors which have registered excellent growth include commercial vehicles, three wheelers, construction equipment machinery, soya oil, tractors and sugar.
On the concerns of industry revealed by the survey, 'Competition from Imports' (50 per cent), 'Regulatory Burden' (42 per cent) and 'Lack of required infrastructure' (41.7 per cent) figure as the three most important issues.
A majority of 63.6 per cent of the respondents expect the business situation in their respective sectors to improve moderately whereas 31 per cent expect the situation to remain same in the next six months.
"The current expectations on the investment outlook for the next two months also point towards an impending recovery in investment cycle supported by improving capacity utilization levels amidst domestic demand recovery.
"Further, a continuous push for structural reforms such as GST, PSU bank recapitalization and time-bound insolvency resolution would also support the recovery," the survey said.As many as 59.1 per cent of the respondents reported capacity utilisation in the range of 65-80 per cent during the quarter, whereas 13.6 per cent reported capacity utilisation to be above 80 per cent.