Contrary to expectations, industrial growth slipped marginally to 13.5 per cent in March this year from a robust expansion of 15.1 per cent in the previous month.
Accordingly, industrial growth for the entire 2009-10 fiscal, as measured by the Index of Industrial Production (IIP), ended up in double digits at 10.4 per cent as compared to a paltry 2.8 per cent increase witnessed in the previous fiscal which was mainly owing to the impact of the domestic slowdown in the wake of the global financial crisis.
The IIP data for March released here on Wednesday revealed that it was primarily the manufacturing sector that was responsible for an overall industrial growth of over 10 per cent for six months in a row even as economic analysts had expected a sustained expansion of over 15 per cent, like in the previous three months.
Commenting on the overall macro performance at a function here, Finance Minister Pranab Mukherjee exuded confidence that despite the marginal decline in factory output in March as compared to the 15.1 per cent growth in February, the figures were good enough for a 7.2 per cent economic growth during 2009-10. “…going by the industrial sector growth, especially in the past six months, I expect GDP numbers for 2009-10 should now be around 7.2 per cent,” he said.
Echoing similar sentiments, Planning Commission Deputy Chairman Montek Singh Ahluwalia said: “March IIP numbers not going to impact the GDP growth estimates for 2009-10. We are hoping that during 2010-11, we will close the fiscal with double digit factory output.”
The manufacturing sector, which has a weight of nearly 80 per cent in the IIP, posted a robust 14.3 per cent growth in March while mining and electricity generation saw an increase of 11 per cent and 7.7 per cent, respectively.
As per the IIP data, while 14 out of the 17 industrial groups notched up positive growth in March, the sectors that languished with negative growth were jute, textile products and wool, silk and man-made fibre textiles.
Going by user-based classification, the consumer durables segment that was severely impacted by the global crisis witnessed a healthy growth of 32 per cent during March. However, while capital goods production also increased by 27.4 per cent, the consumer non-durables segment lagged far behind with a meagre growth of 3.3 per cent during the month.
For the entire fiscal year, driving the industrial growth was the manufacturing sector with an output expansion of 10.9 per cent as compared to 2.8 per cent in 2008-09. Mining output and power generation also grew by 9.7 per cent and 6 per cent as compared to an output increase of 2.6 per cent and 2.8 per cent, respectively, in the previous fiscal.
Going forward, economists anticipate a slight easing in factory output growth in the coming months owing to the impact of stimulus roll-back coupled with the uncertainty over global economic recovery.
