A combination of a bad monsoon, lower-than-estimated gross domestic product (GDP) growth so far and weak demand is hardly good news for fresh investments, especially at a time when capacity utilization for various industries has remained low for some time.
As the chart alongside shows, the capacity utilization forecast for many industries (apart from steel) such as cement, commercial vehicles, passenger vehicles, two-wheelers for 2015-16 is in the 60-70% range. In 2014-15, capacity utilization for commercial vehicles was 54%, the lowest in at least six years. The capacity utilization of passenger vehicles has remained steady at 65% for the last two years. Note that the measure for all industries in the study was over 75% in 2009-10.
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