Two main factors, according to the Survey, point towards this. One, a substantial step-up in the sanctions and disbursements to the private corporate sector by the all-India term-lending institutions in 1997-98 and, second, a vigorous growth in non-POL imports in the same year.

Assistance by the FIs grew by 48.8 per cent while sanctions increased by 28.5 per cent over 1996-97. This was in contrast to the sharp decline of 14.7 per cent in sanctions and a modest growth of 8.4 per cent in disbursements in 1996-97.

FIs' assistance, opines the Survey, was one of the few quantitative indications of a potential recovery in industrial production.

Non-POL imports showed a "vigorous" 14.5 per cent growth compared with a negative growth of 0.2 per cent in 1996-97. Total imports grew by 5.8 per cent in 1997-98 (provisional) after a slow down in thefirst quarter of the year.

A significant feature in 1997-98 was the continuous decline in POL imports primarily due to a fall in international prices. The Survey notes that the imports after growing by 22.9 per cent in 1994-95 and 28 per cent in 1995-96 decelerated to 6.7 per cent in 1996-97. The deceleration had been across-the-board caused among other things by a weak domestic demand and slow down in industrial activity.

Growth of GDP from manufacturing decelerated to 7.4 per cent from 14 per cent in 1995-96. A slow down in investment also contributed to a lower import growth.

Imports of capital goods, particularly machinery, transport equipment and project goods, declined in 1996-97 and continued to be so in 1997-98 as well. The Survey says the composition of imports does not show any trend during the nineties. In 1997-98, the share of food and allied products and fertilisers in total imports increased, the former from 3.8 per cent in April-January 1997 to 4.3 per cent in April-January 1998.

Growthof imports of food products (including cereals, pulses, and edible oils) accelerated from minus 20.6 per cent in 1995-96 to 12.2 per cent in 1996-97 and to 20.3 per cent in April-January 1998.