• Industry grew by just 1.0 per cent in 2012-13 and slowed further in 2013-14, posting a modest increase of 0.4 per cent.

• During 2013-14, FDI inflow (including equity inflows, reinvested earnings and other capital) was US$ 36.4 billion. Net FDI inflows had been $ 21.6 billion during 2013-14. Overall gross bank credit flow to industry has increased by 14.9 per cent in 2013-14, lower in comparison with 20.9 per cent growth achieved in 2011-12 and 17.8 per cent growth in 2012-13.

• In order to boost manufacturing sector, the government has already announced setting up of sixteen national investment and manufacturing zones (NIMZs). Of these, eight are along the Delhi Mumbai Industrial Corridor (DMIC).

• The policy focus now needs to target key growth drivers in the short term. One of the crucial drivers can be revival of the private corporate sector investment. Push ahead with critical reforms and removal of infrastructure bottlenecks.

• The near term industrial outlook is conditional on continued improvements in the policy environment and quick return to peak investment rate. With the improvement in overall macroeconomic environment, industry is expected to revive and growth can accelerate gradually over the next two years.

Industrial policy focus on manufacturing revival through investment zones, private investment revival, and infrastructure reform. Industrial activity was weak with slowing growth and moderated bank credit expansion; FDI remained an important financing source. The government announced establishment of national investment and manufacturing zones, including locations along a major industrial corridor, to bolster manufacturing. Policy priorities set out include revival of private corporate investment, prompt implementation of critical reforms, and removal of infrastructure bottlenecks. The industrial outlook is conditional on policy improvements and a return to higher investment rates to support gradual recovery.