Index of Industrial Production (IIP) rises 2 pct,India Inc says ‘not enough’

Factory output,as measured in terms of IIP had contracted by 0.7 per cent in September last year.

Written by PTI | New Delhi | Published: November 12, 2013 7:02:24 pm

After remaining flat in August,index of industrial production (IIP) is showing signs of recovery as factory output grew by two per cent in September,mainly on account of better performance by power and mining sectors.

Factory output,as measured in terms of Index of Industrial Production (IIP),had contracted by 0.7 per cent in September last year.

Meanwhile,IIP for August this year has been revised to 0.43 per cent from the provisional estimate of 0.6 per cent.

According to data released by the government,industrial output for April-September is 0.4 per cent compared to 0.1 per cent in the same period of 2012-13.

Power generation showed a healthy growth of 12.9 per cent in the month under review. Expansion in power generation was 5.9 per cent in April-September as compared to 4.6 per cent in the same period of the last year.

The mining sector,with a weight of about 14 per cent in IIP,grew by 3.3 per cent in September as against 2.2 per cent in the same month last fiscal.

However,during April-September,the output shrank by 2.5 per cent as against a contraction of 1.1 per cent.

The manufacturing sector,which constitutes over 75 per cent of the index,grew by meagre by 0. 6 per cent in September as against a decline a of 1.6 per cent a year ago.

During April-September,the sector’s output grew by 0.1 per cent compared to a decline of 0.3 per cent in same period last year.

Capital goods production,a barometer of demand,showed a decline of 6.8 per cent in the month as against a contraction of 13.3 per cent in September 2012.

The segment declined by 0.7 per cent in April-September as against a sharp contraction of 14.2 per cent in the comparable period.

The consumer durables segment contracted by 10.8 per cent in September as against a decline of 1.5 per cent in the same month last year.

During April-September,the segment contracted by 10.9 per cent compared to a growth of 4 per cent the same period last year.

The growth in non-durables sector was 11.3 per cent in the month under review as against 1.4 per cent in September last year.

During April-September,the segment’s growth was 7.3 per cent compared to 1.6 per cent in the same period last year.

Overall,the consumer goods grew by 0.6 per cent in September compared to flat output in the same month last year.

During April-September the consumer goods output contracted by 1.3 per cent compared to 2.7 per cent growth in the corresponding period last year.

Intermediate goods segment expanded at a rate of 4.1 per cent in September compared to 1.7 per cent in same month last year. During April-September the segment grew by 2.6 per cent compared to 1.1 per cent in the six month period last year.

The basic goods segment grew at a rate of 5.4 per cent in September compared to 2.7 per cent in same month last year. During April-September the segment grew by 1.2 per cent as against 2.7 per cent in six months period a year ago.

In terms of industries,13 out of 22 industry groups in the manufacturing sector have shown growth.

2 pct rise in industrial output not enough: India Inc on IIP nos

India Inc today said the rise in industrial output which came in at 2 per cent in September was not enough to conclude that recovery is on the cards as manufacturing growth would remain subdued in coming months.

“The modest increase in IIP for the month of September is not reason enough for us to conclude that industry has turned the corner and is on a path to recovery,” CII Director General Chandrajit Banerjee said.

Industrial production showed signs of recovery as the output grew by two per cent in September,mainly on account of better performance by power and mining sectors.

“Pace of industrial activity in September belied market expectations as it rose by a less than anticipated 2 per cent.

It is worrisome that the activity in the manufacturing sector has remained subdued for almost 2 years now,” Assocham President Rana Kapoor said.

The manufacturing sector,which constitutes over 75 per cent of the index,grew by a meagre 0.6 per cent in September as against a decline a of 1.6 per cent a year ago.

During April-September,the sector’s output remained almost flat as it grew by just 0.1 per cent compared to a decline of 0.3 per cent in same period last year.

“Positive growth in manufacturing has shown revival. However,we expect the growth in manufacturing to be subdued in the coming months as a result of the current slowdown in domestic demand and lack of investor optimism given the usual uncertainty that builds around elections,” Ficci President Naina Lal Kidwai said.

The data further revealed that consumer durables segment contracted by 10.8 per cent in September as against a decline of 1.5 per cent in the same month last year.

“The performance of consumer goods – particularly that of consumer durables,continues to be a cause for concern as it indicates very poor demand,” Banerjee said.

Overall the consumer goods grew by just 0.6 per cent in September this year compared to flat output in the same month last year.

“Negative growth in capital goods indicates that investment cycle is still in the fragile territory which needs to revive with reduced costs of funds by rate cut and reduced costs of doing business by improving regulatory environment,” President of PHD Chamber of Commerce Suman Jyoti Khaitan said.

As per the data,output of capital goods,a barometer of demand,showed a decline of 6.8 per cent in the month as against a contraction of 13.3 per cent in September 2012.

Power generation showed a healthy growth of 12.9 per cent in the month under review. Expansion in power generation was 5.9 per cent in April-September as compared to 4.6 per cent in the same period of the last year.

“The robust performance of the electricity sector,evident this month would have to be sustained with the mining sector improving its performance,” Banerjee said.

The mining sector,with a weight of about 14 per cent in IIP,grew by 3.3 per cent in September as against 2.2 per cent in the same month last fiscal.

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