Industrial growth slows to 4.1% in August

The industrial growth of the country slowed to 4.1 percent in August on account of the poor performance of the manufacturing sector and a decline in mining output, indicating an economic slowdown.

Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 4.5 percent in August last year.

During the April-August period this fiscal, IIP growth stood at 5.6 percent, as against 8.7 percent in the same period last year.

Meanwhile, the IIP growth figure for July this year has been revised upward to 3.8 percent from the provisional estimate of 3.3 percent.

The output of the manufacturing sector, which constitutes over 75 percent of the index, grew by only 4.5 percent in August, compared to 4.7 percent expansion in the same month last year, according to official data released on Wednesday.

Mining output declined by 3.4 percent in August this year, as against a growth of 5.9 percent in the same month last year.

Growth in capital goods output slowed to 3.9 percent in August, in comparison to a growth of 4.7 percent in the same month of 2010.

Growth in production of intermediate goods slowed to 1.3 percent during the month under review, as against a growth of 5.8 percent in August, 2010.

Consumer durables output grew by 4.6 percent in August, compared to a growth of 8.1 percent in the corresponding month last year.

However, electricity production improved, witnessing growth of 9.5 percent in August this year, as against mere growth of a mere 1 percent in August, 2010.

Industrial growth falls to a meagre 3.3%

Industrial growth fell to a meagre 3.3 percent in July this year on account of poor performance mainly by capital goods, manufacturing and mining sectors, reflecting sluggishness in the economy.
    
Growth in the factory output, as measured in terms of the Index of Industrial Production (LIP), had stood at 9.9 percent in July last year.
    
During the April-July period of this fiscal, IIP growth stood at 5.8 percent, as against 9.7 percent in the corresponding four-month period last year.
    
Output of the manufacturing sector, which constitutes over 75 percent of the index, grew by only 2.3 percent in July compared to 10.8 percent expansion in the same month last year, according the official data released today.
    
Production of capital goods declined by 15.2 percent in July, in comparison to a growth of 40.3 percent in the same month of 2010. The growth in mining production was 2.8 percent in the month, down from 8.7 percent in the same month last year.
    
Production of intermediate goods fell by 1.1 percent during the month under review against a growth of 8.5 percent in July 2010. Consumer durables grew by 8.6 percent in July as compared to a growth of 14.8 percent in the corresponding month of last year.
    
However, electricity production improved witnessing a growth of 13.1 percent in July this year as against a growth of 3.7 percent in July, 2010.

Non-durable consumer goods (FMCG) production also grew by 4.1 percent in July, compared to a decline of 0.9 percent in the same month last year.
   
Meanwhile, the industrial growth number for June this year has been maintained at the provisional figure of 8.8 percent. However, the IIP numbers for April has been revised downward to 5.3 percent as per the final revision from the previous estimate of 5.7 percent.
   
The fall the industrial production numbers, as shown by the latest data, suggest continuation of the sluggishness in the economy, experts said.
   
The IIP had expanded by 5.9 percent in May but there was brief revival in June with industrial production growing by 8.8 percent.
   
India's economy grew by 7.7 percent 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 borrowings, thus hindering fresh investments.
   
The Reserve Bank has hiked interest rates 11 times since March 2010 to tame inflation. Headline inflation has been above the 9 percent mark since December last year.