New Delhi: Assuring the industry of speeding up reforms, government on Wednesday agreed to set up a joint task force with India Inc for reviving factory output, which slowed down to 5.6 per cent in May from 8.5 per cent an year ago.

Union Commerce and Industry Minister Anand Sharma held a review meeting with senior members of the CII, including its President B Muthuraman.
He will hold a similar meeting with the FICCI leadership on Thursday.
"Several suggestions have been given to the government and the Minister has promised to take action on many of them. Industry is confident that actions will be taken, reforms will be speeded up and I do see positive things," Muthuraman said.

The pending reforms agenda includes introduction of the Goods and Services Tax, increasing FDI in insurance sector from the present 26 per cent and opening multi-brand retail to overseas investment.

Briefing reporters about the outcome of the meeting, Sharma said he would chair a joint task force with the industry for ensuring a congenial business environment.

At the support level, the task force will be co-chaired by Secretary in the Department of Industrial Policy and Promotion (DIPP) and an industry leader. It will also include economists and analysts.

The decision to engage with the industry comes a day after official data pointed to a dismal performance in the industrial production, affected by a lower expansion 5.6 per cent in May in manufacturing from 8.9 per cent a year ago.

The industry raised issues like demand compression because of high interest rates which are also having an adverse impact on the capacity addition.

The Reserve Bank has raised the benchmark interest rates by 250 basis points (2.5 percentage points) since March, 2010 to tame inflation.

About the new manufacturing policy, the Commerce and Industry Minister said the committee of secretaries, chaired by TKA Nair, Principal Secretary to Prime Minister, is fine-tuning the issues.

The industry also made suggestions about allowing foreign direct investment in the multi-brand retail, Sharma said, adding, the industry-government interaction would be stepped up.