statesman news service
NEW DELHI, 12 JUNE: A miserable performance by the manufacturing and mining sectors pulled down industrial output growth to a measly two per cent in April, prompting the Planning Commission deputy chairman, Mr Montek Singh Ahluwalia, to term the development as “disappointing”.
The dismal data released officially today has also strengthened the case for rate cut by the RBI and speedy clearances of projects to boost investment.
The Index of Industrial Production (IIP) in April has moderated from 3.4 per cent in March on account of dismal performance of manufacturing and mining sectors, although it is better compared to a contraction of 1.3 per cent in the same month of last fiscal.
Mr Ahluwalia said: “The growth rate that has come out today is low… there is a slight upturn, but it&’s not strong enough.”
Significantly, he remarked that “The RBI is watching the situation… and I hope that they will take a sensible decision”.
The decline in factory output has mainly been on account of dismal performance of key sectors such as manufacturing, mining, power and capital goods sectors.
The manufacturing sector, which constitutes over 75 per cent of the index, grew by a meagre 2.8 per cent in April. In the year-ago period, however, it had declined by 1.8 per cent.
Power generation grew by just 0.7 per cent in April this year compared to a growth of 4.6 per cent last year. The mining sector output contracted by three per cent in April this year compared to a decline in the production by 2.8 per cent in April 2012.
Capital goods output saw a growth of just one per cent in April, compared to a decline in production by 21.5 per cent in the year-ago period.
IIP growth rate for March this year has been revised to 3.4 per cent from the provisional estimates of 2.5 per cent released last month.
The industrial growth in 2012-13 has also been revised slightly upwards to 1.1 per cent from provisional estimates of one per cent released in May. IIP growth in 2011-12 was 2.9 per cent.
Overall, 13 out of the 22 industry groups in the manufacturing sector have shown positive growth during April.
The consumer goods output also saw a meagre growth of 2.8 per cent in April, compared to 3.7 per cent in the same month last year.
The decline in the output of consumer durables stood at 8.3 per cent in April, from a growth of 5.4 per cent in the same month of 2012.
The consumer non-durables output grew by 12.3 per cent in April against 2.3 per cent in April last year.
The intermediate goods production grew by 2.4 per cent in April compared to a decline in output by 1.8 per cent in the year-ago period.
The basic goods output grew by 1.3 per cent in the reported month from 1.9 per cent in April 2012.