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    <title>Government Initiatives Generate Optimism</title>
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    <description>Government policy initiatives have improved business sentiment and are linked to projected modest industrial output growth near 3 per cent, but the sector remains vulnerable due to infrastructure and energy constraints, weak export demand, and a fragile investment recovery. Manufacturing gross capital formation fell in 2011-12 and foreign direct investment inflows into key sectors declined, while filings of industrial entrepreneur memoranda decreased and bank credit growth to industry moderated, leaving revival of investment as the principal challenge.</description>
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