Signalling a recovery of sorts, though fragile, after two straight months of contraction, industrial output showed a turnaround with a growth of 2.4 per cent in January this year on the strength of an improved performance in sectors such as manufacturing and power.
Official data on the Index of Industrial Production (IIP) released here on Tuesday by the Central Statistics Office (CSO) reveal that the overall industrial growth in January, 2013, has been more than double as compared to an expansion of one per cent witnessed in the same month in 2012. However, of more significance is the fact that it does mark a move to positive territory from negative growth rates posted for November and December last year at (-) 0.8 per cent and (-) 0.5 per cent, respectively. As a result, the cumulative IIP growth for the April-January 2012-13 stands pegged at one per cent, down from 3.4 per cent during the same period of the previous fiscal.
With the recovery process being at best tepid, India Inc is of the view — and the Finance Ministry tends to agree with its logic — that an easing of interest rates by the Reserve Bank of India during its mid-quarter monetary policy review on March 19 will catalyse consumer demand and spur investments to boost industrial growth.
Arguing in favour of a rate cut, Department of Economic Affairs (DEA) Secretary Arvind Mayaram noted that the apex bank would ‘certainly’ take into account the various developments and macro-economic situation before taking a view on interest rates. “Inflation numbers have also come down, so there is certainly a case for further impulses for growth,” he said.
As per the IIP data, the manufacturing sector comprising more than 75 per cent of the index, witnessed a growth of 2.7 per cent in January this year as compared to 1.1 per cent posted for the same month of 2012. The sector’s cumulative growth in output for the April-January period this fiscal, however, remained lower at 0.9 per cent as compared to an expansion of 3.7 per cent in the like period in 2011-12. Electricity generation went up by 6.4 per cent in January 2013 as compared to 3.2 per cent growth in the same month a year ago. However, for the April-January period, the growth was lower at 4.7 per cent as compared to 8.8 per cent in the same period last fiscal. Mining output in January this year contracted more, by 2.9 per cent as compared to an output decline of 2.1 per cent in the same month in 2012. For the April-January period also, mining growth showed a decline of 1.9 per cent as compared to a contraction of 2.5 per cent in the year-ago period.
“We are glad with these numbers though this is not a strong recovery as yet,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told The Hindu.
“These numbers suggest that the economy is getting there and that there will be more robust growth in the future,’’he added.