Hopes of recovery recede with industrial production contracting by 4.2 percent in October, mainly on account of a drag by the manufacturing sector and a dip in the output of capital as well as consumer goods.Manufacturing ,that constitutes over 75 percent of the index, went down by 7.6 % in October as compared to a dip of 1.3 % same month last year. We have come to a strange pass in our economy that neither inflation that is tending to zero nor any lowering of key rates seem to be holding much relevance. Manufacturing ,that once was our mojo was abandoned steadily Chasing the chimera of IT boom, every major manufacturer ,auto,steel,cement ; preferred to put greater faith and attention to founding big scale Financial services / IT.Of course many had found short sustenance in these two areas, while manufacturing languished in relative neglect. In fact Tatas have largely breathed easy of late,because of TCS.
Nations across the globe are having hiccups in their economies too But they have kept manufacturing as the prime concern,.Germany is showing steady but modest recovery since October ,in this sector.On the contrary,we are shortsighted enough to have embraced tightly a seasonal ally in the likes of IT that has many other suitors.A dipping global economy would further reduce the size and portion of this pie.It would not be easy then to switch back to competitive manufacturing as it was to jump off it.
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