Sectors Expecting Growth Amid Drastic Economic Slowdown
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Indian economy faced GDP downfall to 5% as compared to 8% in the last year quarter. Despite this, few sectors related to consumer grounds are achieving growth more than the last fiscal year. To overcome this trouble, the Government has announced a package of measures like liberalizing FDI in various sectors, Consolidation of Big Banks, bringing in more capital for Banks. There are various sectors which faced a drastic trouble whereas some sectors remained mild affected from insolvency.
In the slowdown period, sectors like Auto, Banking and Corporate have been facing economic trouble due to GDP fall and global trade. Amid economic problems, there were also sectors that bucked the trend, such as food production, apparel and steel, which grew at a faster clip than in 2018.
Food Production Sector
Some food production companies are targeting a high percentage of production and manufacturing as compared to last year. Companies like Candor which provides supplies to the likes of future retail, Amazon and Grofers mentioned the revenue record of 50 crore in 2018-19 and its target is to gain around Rs 100 Crore this fiscal year. Manufacturing of food products saw an annual growth of around 15% in April-June 2019 in the index of industrial production (IIP). The growth in the corresponding period last year was 12%. Food processing contributes around 9% to India’s manufacturing output, as per government data.
Another sector that achieved a similar rate of growth is apparel. Apparel industry’s export record stood at around 4.2 Billion Dollars (30,000 Crore) in April-June 2019. It is equivalent to the seven percent rise in rupee terms and three percent rise in dollar terms. Although India saw a lower dip in June, but as compared to other sectors, Apparel remained mild affected with economic slowdown. India has a long way to go with its global share of 4 % in 2017 as compared to China’s 34% and Vietnam’s 6%.
According to the President of Tirupur Exporter’s Association, Raja M Shanmugam , “The government should encourage exports of readymade garments instead of raw cotton and yarn. That’s where Bangladesh and Vietnam have an advantage”. Due to the rise in Apparel market on online platforms, the segment account for around 30 percent of e-commerce transactions.
Manufacturing segments like steel recorded the growth percentage of 14 percent annually in April-June quarter this year. It jumped 4 percent more than the records of last year in the same quarter. According to the Chief Economist, Care Ratings, Madan Sabnavis, Government’s infrastructure creation and affordable housing programme could be driving the demand for steel. The government plans to spend Rs 100 trillion on infrastructure in the next five years and build nearly 20 million affordable homes in the next three years.
Although, the major segments of the economy are suffering financial trouble at par but still some sectors within manufacturing are still growing, a few even at a higher rate than last year. But if consumers decide to curb down their spending, it would drive bad situation to worse