New Delhi: India's industrial output may expand by less than two percent in 2012-13 as performance of manufacturing, capital goods, and durables sectors remains in a quite bad shape, a Assocham study said on Wednesday.

In 2011-12, Index of Industrial Production (IIP) grew by 2.8 percent on poor manufacturing and mining output.

"Growth prospects for India's industrial production look quite weak and the output may show less than two percent expansion in the current financial year," Assocham said.

It said, "manufacturing, the main stay of the overall IIP remains in a quite bad shape and so are the other critical sectors such as capital goods, durables and non-durables."

In April-July of the current fiscal, IIP had contracted by 0.1 percent. The government is scheduled to release the IIP data for August on Thursday.

The chamber said it has projected the "not-so-bright" outlook for industrial growth despite the visible signs of improvement in business confidence in last two months on government's bold policy initiatives.

"In any case, it is not only the business confidence but also the consumer confidence all through the world, which is at low ebb and that is a real area of concern," Assocham President Rajkumar N Dhoot said.

The study has said the pressure on manufacturing, capital goods and durables will remain mainly on high raw material cost, prolonged slowdown and recession in several part of the world, high interest rate and low consumer confidence.

It said the government and industry must find innovative ways to revive exports mainly in Asia as it is still growing.

Also, trade imbalance with China has to be corrected so that Indian exporters get access to a big market there, it added further.

(Agencies)

Latest News from Business News Desk