Cement production increased by 27 per cent and steel having recorded a decline of 1.8 per cent during 1998-99, posted a positive growth of 1.5 per cent during April 1999.

A recovery was also evident in the automobiles sector with the growth which was first noticed in the two wheeler segment expanding to passenger cars and commercial vehicles which has posted a sharp rise of over 28 per cent, the review said.

In the petroleum sector, consumption has sputted by recording a 12 per cent increase in April 1999 after a six per cent growth during 1998-99. Crude oil production was up in April after a consistent decline during 1998-99. Thermal powergeneration was up 11 per cent in April 1999 to cover up for the fall in hydel power generation.

On the revenue side, total tax collection during April-May 1999 was 21 per cent higher than the same period last year. Inflation has remained under control with WPI rising by only four per cent in May 1999. The CPI growth, however, is still higher at over eight per cent. The review has pointed out that political instability following the loss of vote of confidence in the Lok Sabha by the BJP-led Government and the military action in Kashmir did not augur well for the country's balance of payment situation. The rupee weakened as India had to engage itself in air strikes in Kashmir.

Despite these unfavourable developments, the overall balance of payment position remained strong, the review has stated. Reserves went up by $1 billion to $30.6 billion as on May 28, 1999. Net investments by FIIs remained high at $600 million during April-May 1999 as compared to $243 million outflow during the same period in1998.

The Indian Meteorological Department's forecast of a normal monsoon has increased the probability of a good kharif crop, which is expected to lead to an increase in domestic consumption spending. The outlook for investment, however, continues to remain bleak during the year.