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Statistics show economy is healthy, so confidence is strong despite Kargil, says CII

Business confidence continues to be strong and upbeat despite the Kargil conflict, the Confederation of Indian Industry said in New Delhi early this week.

''The fundamentals are strong and this augurs well for the economy,'' the CII said. It said demand for motor vehicles, steel, cement is improving with road construction and housing activities picking up.

The demand for the basic sectors which had suffered reverses, is showing upward trend translating into higher production. ''Again with agricultural production up, the rural income is up and consequently demand for industrial products has shown upward trend,'' the chamber said.

Among the manufactured products which have shown good progress is cotton textiles, paper and paper products, basic chemicals and chemicals products, rubber and plastic products, basic metal and alloys, machinery and equipment.

Among the use-based industries, basic goods have increased by 5.1 per cent, capital goods by 19.2 per cent and consumer durables have grown by an impressive figure of 18.4 per cent.

Despite several pressures, inflation is at 14-year low at three per cent. Prices of manufactured products continue to remain stable, agricultural prices are contained and the prices of the food artciles have also come down from 10.5 per cent to 5.28 per cent.

Exports have grown by two per cent and imports at 8.66 per cent, reflecting a pick-up in industrial activity. Foreign exchange reserves are at comfortable $ 33.48 billion. The Sensex is hovering between 4150 and 4200 level, reflecting confidence in Indian economy.

Added to this is the latest survey by at Kearney covering 1,000 top world companies. It ranks India as the sixth most preferred destination for foreign direct investment or FDI, putting India above Germany and Poland since December 1998. India has stepped up the ladder, from seventh position in December 1998 to sixth position in December 1999.

UNI

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