Industrial output grew for a second successive month in May as strong domestic demand offset dipping exports. After growing 1.2 per cent in April,industrial growth further recovered to 2.7 per cent in May over the corresponding month last year,inspiring hope that this might just be a trend that is here to stay.
Industrial production had registered negative growth for three straight months from January to March this year. The April figure,which was earlier recorded at 1.4 per cent,was revised to 1.2 per cent this month.
Experts,however,warn that the monsoon could well turn out to be a make-or-break factor in such a situation especially now when industrial growth is only on the verge of a recovery. Processed food production is down 14.7 per cent in May and 27.2 per cent in the first two months of this fiscal.
(Industrial growth is) showing a further improvement. I think we are back on track as was expected, finance secretary Ashok Chawla said. Similar views were expressed in other quarters of the government with Planning Commission deputy chairman Montek Singh Ahluwalia saying that the worst is over. The real question is how rapidly we will resume growth, he said.
Among the various commodity groups based on use-classification,barring capital goods and consumer non-durables,all other categories basic goods,intermediate goods and consumer durables registered positive growth at 3.8 per cent,6.1 per cent and a healthy 12.4 per cent respectively.
Production in capital goods and consumer non-durables fell 3.6 per cent and 2.3 per cent respectively.
Chawla said the demand in consumer non-durables (or the FMCG sector) sector was not picking up because capital goods,used by people for new projects,become relatively less significant in the scheme of things when there are issues of downturn.
He admitted that the monsoon is a matter of concern and its absence will have an impact on various segments.
Industrywise,nine out of a total of 17 industries registered positive growth,slightly worse than last month when 11 of the 17 groups showed positive growth. The category,Other Manufacturing Industries, fared the best growing at 27.3 per cent,followed by Rubber,Plastic,Petroleum and Coal Products which grew 16.4 per cent and Wood and Wood Products; Furniture and Fixtures which grew at 15.3 per cent in May.
There were,on the other hand,eight industry groups whose production fell over May last year. Output in Jute and Other Vegetable Fibre Textiles (except cotton) fell 20 per cent followed by Food Products and Beverages,Tobacco and Related Products, which fell 14.7 per cent and 10.3 per cent,respectively.