IIP shrinks for third month; industry seeks cut in rates
Factory output contracts 0.6% in Dec due to manufacturing slump.
Showing no signs of recovery, the industrial production growth rate remained in the negative zone for the third month in a row, contracting 0.6 per cent in December 2013, mainly on sluggishness in the manufacturing sector.
The manufacturing segment, which contracted 1.6 per cent during the month, has a weight of over 75 per cent in the index of industrial production (IIP), and has contracted for most part of the current fiscal.
Expressing concern over the dipping industrial output, TCA Anant, chief statistician of India, said, “IIP continues to show low growth for the past 7-8 months, mainly because of slump in manufacturing. At this point of time, there is a need to boost fresh investments to bring back factory output to the positive terrain”.
Meanwhile, the contraction in IIP during November 2013 has been revised to 1.3 per cent, from the provisional estimate of 2.1 per cent.
Concerned over the falling factory output, India Inc made a case for an accommodative monetary policy and investment revival measures to arrest the decline.
“Investment revival measures deserve utmost priority. What is required is to infuse competition in the coal and mining sectors, addressing supply side bottlenecks in infrastructure, streamlining the clearance procedures and implement the national manufacturing policy to provide a boost to manufacturing,” the CII said in a statement.
“We look forward for an accommodative monetary policy to spur demand and revive investment activity especially as inflation has started receding,” CII director general Chandrajit Banerjee was quoted by PTI as saying.
According to the IIP data, the consumer durables segment also shriveled 16.2 per cent as against a contraction of 8.1 per cent during the same period a year ago. The mining sector, meanwhile, grew 0.4 per cent as compared to a negative 3.1 per cent during the same period a year ago, while basic goods posted a growth of 2.4 per cent compared to 2.2 per cent during the year ago period. Capital goods and consumer goods, however, continued to be in the negative zone, 3 per cent and 5.3 per cent, respectively, during the period.
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