Industrial outlook bright, says Survey

Lauding the strong industrial performance, the Economic Survey on Thursday asked the government to ensure a balance and sustained growth as certain sectors have failed to see a revival in 2009-10.

"The manufacturing sector has been showing a buoyancy in recent months rarely seen before... There is also a substantial pick up in corporate earnings and profit margins," the pre-Budget Economic Survey said.

It, however, pointed that while the recovery was broad based some sectors like food products, cotton textiles and metals failed to see any revival in the current year. Capacity addition in some of the key infrastructure sectors like power and roads was lagging, it added.

On the brighter side, it said that there was reasonable hope that demand itself would not be a constraining factor and raising investible resources would not be a major problem for the industry despite the government's huge borrowing programme.

The government's borrowings in 2009-10 was over Rs 4 lakh crore and when first announced, the industry had feared that it would be elbowed out.

The Survey also pointed out that bank lending rates had not come down to the desired level, prompting corporate to tap alternate resources and non-banking funding rose by Rs 50,000 crore (Rs 500 billion) during the first 10 months of the current fiscal.