New Delhi: Expressing disappointment over dismal 0.1 per cent industrial growth rate in April, Finance Minister Pranab Mukherjee on Tuesday said the government would take steps to give positive signals to the industry.
"IIP figure for April is no consolation, I'm disappointed. Negative rate of investments is continuing. We are taking steps to kick start the economy. Steps have been taken to encourage investments in infrastructure sector," he said during an interaction with media.
"I am disappointed. Industry has not yet picked up. Negative sentiments are there. We have to take steps to give positive signals (to the industry)", he told reporters.
Industrial production growth rate slowed down sharply to 0.1 per cent in April from 5.3 per cent a year ago, due to contraction in capital goods and dip in manufacturing output, reflecting the sluggish state of the economy.
The IIP was negative in March, which declined to 3.2 per cent.
Mukherjee said the government cannot take comfort from the fact the industrial output turned positive in April from negative a month ago.
The performance of the capital goods sector was disappointing, the Minister said, adding that only 12 out of 22 major industrial groups showed positive growth.
The capital goods output, according to the data, declined by 16.3 per cent as against a growth of 6.6 per cent in the same month last year.
Mining output also contracted by 3.1 per cent in April, as against growth of 1.6 per cent in the same month a year ago.
The slowdown in industrial production is likely to put pressure on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18.
SBI Chairman Pratip Chaudhuri said he expected the RBI to cut Cash Reserve Ratio (CRR) by 1 per cent, the portion of deposits that banks are required to keep with the central bank, to ease liquidity situation.
On the S&P report, Pranab said, "We have taken note of their concern and are taking steps to improve the situation."
According to a recently released report by Standard & Poor's Ratings Services, slowing GDP growth and political roadblocks to economic policy-making are just some of the factors pushing up the risk that India could lose its investment-grade rating.
(With additional inputs from PTI)