New Delhi: Expressing serious concerns over contraction in industrial production, industry on Thursday called for immediate policy measures to boost investments in the country.
"The June IIP numbers are disappointing and are a cause for serious concern. Any further decline in GDP growth will have a deleterious effect on employment and on consumer demand," CII said in a statement.
Echoing views, FICCI President RV Kanoria said: "This calls for immediate measures to stimulate investments in the economy".
FICCI said that there is a strong case for RBI to cut interest rates by at least 0.50 per cent.
The chambers said that the situation calls for urgent policy measures both by RBI and the government to salvage industry from further decline in industrial output.
Assocham said the IIP performance is "deeply disturbing" and called for immediate re-set of policy matrix.
"The deep slide in the capital goods sector clearly reflects drop in the investment levels. If investment is to recover and push up growth rates, a deep cut in interest rate is essential," it said.
CII too asked for reduction in short-term lending rate, repo, quick implementation of fiscal consolidation plan, fast tracking of infrastructure projects including power projects.
"These measures if implemented will go a long way in reviving economic activity and restore the poor sentiments in the economy," CII said.
Assocham said that since, India s growth is driven primarily by internal consumption, it is important to nurture these industries as growth drivers.
Industrial production declines by 1.8 per cent in June, against a growth of 9.5 per cent in the same month a year ago.
Hit by global woes and domestic problems, the economic growth rate slowed to a nine-year low, both in the March quarter at 5.3 per cent as well as in 2011-12 at 6.5 per cent.