06 January,2009 09:19 AM IST | | A Correspondent
Engineering and auto component sector MSMEs, that were flush with orders and were showing a growth of about 27.5 per cent in 2007-08, are suddenly showing about 60 per cent cut in schedules ie business orders in terms of volumes and more than that in terms of value.
The growth rate from April to November was hovering over 8 per cent, thus implying that it has been reduced by more than half. Particularly bleak has been the third quarter of the current financial year, which saw orders come to a near stand still. While there are some positive expectations from the last quarter, the average growth rate expected by the industry in the next quarter and next fiscal year is still pretty low.
The policy response to the slowdown has been primarily on the monetary side, as was expected. The RBI has softened key interest rates and also infused more liquidity into the banking system. However, the fiscal package of Rs 31,000 crore announced by the Centre in the first instance and the second support haul announced later is too little, too late.
This situation is a big opportunity for policy makers to create an India which will be more equitable, hi-tech, green and educated, former MCCIA president Ravi Pandit felt. Not only do we need a big quantitative push, but also a quality stimulus driven by a vision that will truly help to transform the economy along with employment and quality of life.
Mukesh Malhotra, President, MCCIA said the agriculture and agri-business segment is the one that creates employment for millions of people, helping distribution of income better.
More investments in agri-led business such as rural roads, communication facilities, processing, cold chain infrastructure, etc are the order of the day since it is these that will eventually help food get to the lone consumer at the end of the chain.
