These are early days yet and individual companies have in the past been spurred to redouble their efforts or change course after poor Q1 figures came in. But the trend as a whole is unmistakable and confirms the assessment of the Centre for Monitoring Indian Economy of a slowdown of industrial production this year.

CMIE's estimate is a good two percentage points below last year's 6.6 per cent. It would suggest that the signs of recovery in 1997-98 have fizzled out all too soon in an environment of political uncertainty and policy paralysis.

It is easy enough to round up the usual suspects to explain a deepening recession. There has been no change in domestic demand which remains slack or substantial improvement in the infrastructure. Business morale, already low, has not been done much good by fiscal and monetary measures taken so far.

Within the corporate world itself the Q1 picture shows other disturbing aspects. A survey by the Confederation of Indian Industry reveals a setback to as many as 93 sectors. Steel, cement, chemicals and the entire automobile sector barring two wheelers are causing serious concern. Sail, Tisco, ACC, Telco and Ashok Leyland are the big names reporting poor results.

It says a great deal about the state of affairs today that among those badly hit are corporates regarded by the market as the bedrock of Indian industry. The decline in growth in the capital goods sector underlines the deepening of the slump and the tapering off of investment. But it is not the case that there is an all-round collapse. Major oil companies have done well thanks to pricing policy changes. Reliance has bucked the trend. Software and pharmaceutical companies have performed exceptionally well, many consumer goods companies have nothing to complain about.

These sectoral ups and downs will undoubtedly come in for closer analysis in the months ahead. One trend has been visible for several years. Core sectors are in trouble not only because of the general economic slowdown. In some cases the malaise almost certainly calls for a re-examination of technologies in use and for organisational restructuring.

The harsh message in the decline in sales followed by a cutback in production is that financial reorganisation and internal reform undertaken by many large corporates since 1991 has not gone far enough, fast enough. The sloughing off of ancillaries or subsidiaries has worked for some corporates for some of the time. In some others, technological upgradation or adoption of new technologies has staved off trouble for the time being.

But the challenges at home and abroad have grown faster than individual and collective responses to them. Corporate India cannot be expected to meet those challenges alone. An intelligent partnership with the government is essential to anticipate trouble, evaluate opportunities and make new departures.