Due to low domestic demand, weak global economic outlook and uncertainty among businesses over the outcome of Lok Sabha elections, 2019, India’s industrial activity is expected to remain unresponsive in the near future, says a report. Dun & Bradstreet (D&B) in a report says the government curtailing its investment due to significant shortfall in tax collections against the target, are expected to keep the industrial activity weak in the near term.
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D&B expects Index of Industrial Production (IIP) to have moderated by 1.5-2 percent during December 2018. As per data released by the Central Statistics Office (CSO), industrial output growth dropped to a 17-month low of 0.5 percent in November on account of contraction in manufacturing sector, particularly consumer and capital goods. D&B top Economist Arun Singh said the likelihood of a robust economic growth during 2018-19 was dented by unfavourable developments and unexpected shocks that occurred during the year.
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He said the upcoming union budget will set the tone for the economy. On rupee, the report expressed concerns over widening trade deficit, rise in global crude oil prices, and uncertainty over the general election outcome are expected to drag down the domestic currency in the near term. D&B also expects the rupee to depreciate to around 70.6-70.8 per US dollar during January this year.