Continuing its dismal performance, industrial growth fell further to 1.9 per cent in September, mainly due to poor output from the manufacturing sector.
Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 6.1 per cent in September last year, as per the latest data.
This development may prompt RBI to halt rate hikes in its policy review next month. Prime Minister’s economic advisory panel chief C Rangarajan described the dip in factory output in September as “disappointing”,
RBI has hiked key policy rates 13 times since March 2010 to tame rising prices.
During the April-September period this fiscal, IIP growth stood at 5 per cent, as against 8.2 per cent in the same period last year.
Meanwhile, the output of the manufacturing sector, which constitutes over 75 per cent of the index, grew by only 2.1 per cent in September, compared to 6.9 per cent expansion in the same month last year.
Capital goods production witnessed negative growth of (-)6.8 per cent in September in comparison to a growth of 7.2 per cent in the corresponding month of 2010.
Consumer non-durables output declined by (-)1.3 per cent during the month in comparison to a growth of 5.8 per cent in the corresponding month of the previous year.
Consumer durables output grew by 8.7 per cent in September, compared to a growth of 14.2 per cent in the corresponding month last year.
Growth in industrial output in the first half this fiscal also witnessed a marked slow down to 5 per cent in the April-September period from 8.2 per cent in last fiscal.
India’s economy grew by 7.7 per cent in the April-June period, the slowest in six quarters.
India Inc had attributed the slowdown to rising interest rates, which have led to an increase in the cost of borrowing, thus hindering fresh investment.
Source – rediffmail.com