Quick action needed to boost investment in manufacturing: FM

Concerned over declining performance of the manufacturing sector, Finance Minister P Chidambaram on Friday said quick decisions were needed to remove bottlenecks hampering investments.

"Of course the decline of fixed investment is a source of concern to the government. It emphasises once again the need to take quick decisions to accelerate investment, especially removing all bottlenecks to investment in the manufacturing sector" he said in a statement.

Chidambaram was responding to first quarter Gross Domestic Product (GDP) numbers, which showed a growth of 5.5 per cent, down from 8 per cent in the corresponding period last fiscal.

The decline in the GDP was mainly on account of poor showing by the manufacturing sector where the growth rate decelerated to 0.2 per cent from 7.3 per cent in the same quarter in 2011-12.

Chidambaram,

however, drew comfort from the fact that the quarterly GDP numbers were better on sequential basis. The GDP registered a growth of 5.3 per cent in the fourth quarter (January-March) 2011-12.

"After continuous reduction in the growth rate in successive quarters beginning in the fourth quarter of 2010-11, this is the first time when quarterly growth rate has exceeded the growth rate in the previous quarter", the Minister said.

At the same time, he added, there was also encouraging signs as the construction sector recorded a growth of 10.9 per cent, up from 3.5 per cent in Q1 of the last fiscal.