Capital goods buoyancy likely to continue

New Delhi, Feb 25 | Updated: Feb 26 2005, 06:06am hrs
A patent pointer to heightened economic activity in the months ahead is seen in the unprecedented growth posted by the capital goods (CG) sector, according to the Survey.

The double-digit growth in the CG industry since 2003-04, indicates that capital formation was taking place in the industrial sector, which could help in strengthening the upswing.

Industrial buoyancy was expected to continue during the remaining period of this fiscal with a strong growth of 21.9% machinery and equipment sub-sector during April-December. Also, the share of machinery has increased in the non-oil imports, indicating stronger economic activity in the country.

The trend is also seen in the increase in exports of manufactured goods.

Rosy Picture
Domestic production, imports of capital goods show major jumps
Trend reflects capital formation in the industry
Process evenly spread across sectors
The ongoing process, which is investment-led and fairly evenly spread within manufacturing sector, reflects the medium and long-term optimism on the part of the investors, said the survey.

The strong performance of the (domestic) capital goods sector coupled with increased imports of such goods also augur well for domestic capacity expansion for a large number of industries.