NEW DELHI: The growth rate in industrial production returned to positive territory in May, though with a paltry expansion of 2.4 per cent, even as a sharp contraction in sectors such as capital goods and mining continues to be a cause for concern.
The IIP (Index of Industrial Production) data released here on Thursday revealed that although the marginal growth this year is a slippage compared to the relatively healthy 6.2 per cent expansion witnessed during the same month of 2011, it still marks a recovery within a month of its performance in April when overall output growth had actually contracted by 0.9 per cent. Provisional figures had earlier estimated a growth of 0.1 per cent growth for the month.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said: “Good news is that bad news is not continuing…The IIP numbers remain weak but are better than previous month. Such growth rates, however, are not acceptable. By October...we will be able to tell if economy is turning around.”
Mr. Ahluwalia went on to analyse the IIP numbers saying, “when investment drops, there is a stock adjustment process...that adjustment is happening” and indicated that the government’s efforts would be aimed at promoting investment in infrastructure