Wednesday, July 10, 2019

Factories increase operating capacity, albeit minimal

Due to regular electricity supply and comparatively cordial labour relations, the average capacity utilisation of domestic factories has increased to 60 per cent – from 58 per cent of last fiscal year’s same period – over the first six months of the current fiscal year 2018-19, according to a new report published by the central bank today.
The half-yearly report ‘Economic Activities Study’, revealed that the industrial capacity utilisation – the rate that measures the extent or level of manufacturing and production of any industry or plant – inched up by two percentage points from the same period of the last fiscal year 2017-18.
 The report is based on a survey conducted in major industries of 23 sectors in 57 districts also revealed the rise in capacity utilisation of soft drinks, jute products, processed leathers, paper and paper products, and plastic goods. “However, capacity utilisation of vegetable ghee and oil, processed milk, grains and poultry feeds, cigarette, resin, electricity wires and cables industries has dropped,” according to the survey.
Though, the gradual rise in industrial capacity utilisation has also been attributed to a progress in the performance of domestic industries that the government is promoting through various incentives and subsidies, the country’s import has not decreased, neither the exports increased.
The 60 per cent of capacity utilisation means 40 per cent of the plants or machineries are sitting idle, which could be utilised to their fullest also helping create employment and making the domestic products more competitive.
The private sector is still in ‘wait and watch’ situation despite the two-third majority, stable government, regular power supply, and cordial labour-management relations, as they are scared with the government’s ‘business unfriendly’ policy and behaviour. “The political stability is the first and foremost condition not the last one for the business-friendly environment,” an industrialist said, adding that the government is not walking the talk and focusing its energy on ‘extortion’ from the businesses and enterprises. 

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