SEARCH

Business » Industry

Updated: February 12, 2013 23:40 IST

Factory output shrinks by 0.6 %

Special Correspondent
Comment   ·   print   ·   T  T  

Close on the heels of a gloomy 5 per cent GDP (gross domestic product) growth projection for the current fiscal which the Finance Ministry questioned for failing to reflect signs of an upturn in the economy, the Central Statistics Office (CSO), on Tuesday, handed down more negative data on the macro-economic front to vindicate its advance estimates.

CSO data on the Index of Industrial Production (IIP) released here show that factory output contracted by 0.6 per cent in December 2012 in stark contrast to a growth of 2.7 per cent notched up in the same month a year ago, mainly on account of dismal performance by sectors such as manufacturing and mining which happen to be the primary drivers of overall economic growth.

Moreover, the IIP data also revealed that after a robust 8.3 per cent expansion witnessed in October owing to festival season demand, December is the second consecutive month that growth in industrial production has remained in the negative territory as the contraction in November output stands revised further downwards from (-) 0.1 per cent to (-) 0.84 per cent.

Accordingly, for April-December 2012-13, IIP growth stands reduced to an expansion by a mere 0.7 per cent as compared to a comparatively healthier increase of 3.7 per cent for the same period in the previous fiscal.

Adding further to the gloomy scenario was the CSO’s data on retail inflation based on the consumer price index (CPI) which showed a surge to 10.79 per cent in January from 10.56 per cent in December. While rural consumer inflation inched up to 10.88 per cent from 10.74 per cent month-on-month, urban inflation also rose to 10.73 per cent from 10.42 per cent.

Thus, even as Finance Minister P. Chidambaram disputed the low GDP growth figure while pointing to “some green shoots” of recovery visible, the economic data now available seem to signal the slowdown getting worse in the wake of high inflation in an environment of low growth.

As per the IIP data, the dismal growth was on account of poor performance of mining and manufacturing sectors coupled with decline in production of capital, consumer and intermediate goods showing both a lack of consumer demand as well as investment.

Growth in manufacturing, which constitutes over 75 per cent of the IIP basket, contracted 0.7 per cent in December 2012 as against a growth of 2.8 per cent in the same month a year ago. For the April-December period, the cumulative growth for the sector stands pegged at 0.7 per cent as against 4 per cent growth in the same period of 2011.

This article is closed for comments.
Please Email the Editor

Worldview with Suhasini Haidar


Extreme outcomes in the Great Game over Ukraine

The shooting down of MH17 is one of the most horrific consequences of the latest version of the "Great Game".

Free for all


An Uncritical Eye - "The World Before Her"

It’s a telling commentary that the media groups blacklisted any news on the film and the VHP chose to make it more popular!

Known for seeking real-life inspirations for his films, he has opted for five newcomers for the film that revolves around the models who gain popularity after featuring in famous calendars. »

Gujarat, Rajasthan and Punjab: The Need for a Border States Group

The aim of the research report by Tridivesh Singh Maini is to examine the approach of the political leadership, as well as the business community, in three ‘border States’ towards India-Pakistan ties.This paper has sought to look at a number of factors, which include politics, economics as well as security issues.Read Article »

  • facebook Facebook
  • twitter Twitter

Resources

More Resources »

Metroplus

More Metroplus »

Sunday Magazine

More Sunday Magazine »

Friday Review

More Friday Review »

Habitat

More Habitat »

Young World

More Young World »

O
P
E
N

close

Recent Article in Industry

In its recommendations on a new DTH licensing regime, TRAI said vertically integrated broadcasters must be subjected to a set of additional regulations, allowing them to control only one distribution platform operators (DPOs).

20-year licence for DTH operators mooted

Recommends cut in existing licence fee to 8 % of adjusted gross revenue »