ASIA NEWS NETWORK
WE KNOW ASIA BETTER
India's industrial growth down to 0.1%
Publication Date : 13-09-2012
Persistent dismal showing by sectors such as manufacturing, mining and capital goods have retarded growth in industrial production to a measly 0.1 per cent in July, prompting experts to prescribe an interest rate cut by the Reserve Bank of India. The apex bank may well consider rate cut in its mid-quarter policy review scheduled for September 17.
Growth in factory output, as measured by the index of industrial production (IIP), was 3.7 per cent in July last year, and 6.1 per cent in the April-July period in 2011-12, according to official data released yesterday.
The manufacturing sector, which constitutes over 75 per cent of the index, suffered a drop in output by 0.2 per cent in July. It had posted a growth of 3.1 per cent in the same month last year. The performance of the manufacturing sector in April-July was poor as output contracted by 0.6 per cent, as against a growth of 6.5 per cent in the four-month period of last year.
Capital goods production was also down by five per cent in July against a contraction of 13.7 per cent in the same month a year ago. The output of capital goods contracted in the April-July period by 16.8 per cent, as against a growth of 8.2 per cent in 2011-12.
Mining output in July dipped by 0.7 per cent, as against a growth of 0.7 per cent in the same month a year ago. The sector’s production in April-July quarter declined by 0.9 per cent, compared to a growth of 0.6 per cent in 2011-12.
Consumer goods production was up 0.7 per cent in July as compared to 6.4 per cent growth in the same month last year. During the April-July period of this fiscal, the growth in the segment was 3.3 per cent, compared to 4.9 per cent in the four-month period a year ago. In all, only eight of the 22 industry groups in the manufacturing sector showed positive growth in July.
Consumer durables production showed a decline in growth rate as this segment increased by 1.4 per cent in July, compared to nine per cent in the same month last year. The output of these goods registered a growth of 6.3 per cent in April-July quarter this fiscal, as against 4.3 per cent in the corresponding period in 2011-12.
Commenting on the dismal performance, finance minister P Chidambaram said that the measly growth of 0.1 per cent for July reveals that the performance of the economy continues to be disappointing, adding that the Centre is intensively engaged with industry on the constraints that affect industrial production and will continue its efforts to find practical solutions to the problems.
He was responding to the Quick Estimates of IIP for July 2012 which were released here today by the ministry of statistics and programme implementation. He said that only eight industry groups out of 22 have shown positive growth.