NEW DELHI, MAR 10: Indian industrial output grew 7.2 per cent in April 1999-January 2000 compared to a meagre 3.8 per cent in the same period a year earlier, surprising analysts who had predicted last month that growth was tapering off. Powered by a double digit growth in the crucial manufacturing sector, the index of industrial production (IIP) recorded an impressive growth rate of 9.4 per cent in January 2000 as against 5.2 per cent in the same period last year. ``The numbers are certainly better than expected," said B B Bhattacharya, director of the Institute of Economic Growth. "There were a lot of indicators showing an industrial slowdown, this is certainly a surprise." The manufacturing sector, accounting for more than two-third of the total weightage in the IPP, recorded a growth rate of 11.4 per cent in January as against just 5.9 per cent in the year-ago period, according to the figures released by the Central Statistical Organisation (CSO) here. While the mining sector continued to post negative growth rates in January, 2000, electricity recorded lower growth rate in comparison to the same period last year. The mining sector continued to post negative growth rate in January, 2000 at 1.2 per cent as against 3.3 per cent in the corresponding period last year. However, the growth trend in April-January period was a static 0.0 per cent compared to a negative 1.1 per cent during the year-ago period. The cumulative growth trend during the first 10 months of the current fiscal in the manufacturing sector was double at 8.0 per cent compared to 4.1 per cent in the previous fiscal. Official data showed that the manufacturing sector grew 8.0 per cent year-on-year in April-January (1999/2000) compared to 4.1 per cent in the same period of fiscal 1998/99, while the electricity sector grew 7.1 per cent against 6.8 percent. Growth in the mining sector was flat compared to a decline of 1.1 per cent in April-January 1999 Analysts said the strong growth in manufacturing in January boded well for final 1999/2000 fiscal year figures. "The numbers are extremely encouraging, growth in the last quarter of 1999/2000 should be much better because of the seasonal impact," said Bidisha Ganguly, economist at SSKI Securities in Mumbai. "Overall a seven percent industrial growth for the full year should be possible," she said. Bhattacharya also expected the industrial sector to show overall growth of seven percent for 1999/2000 compared to 4.0 percent in the previous year. Another analyst said the growth was being driven by good consumption and investment demand, and could be sustained through the first half of 2000 Growth during April-January 1999/2000 in consumer durables was 13.1 per cent against 4.0 per cent a year earlier, in intermediate goods 11.3 per cent against 5.6 per cent and in capital goods 6.2 per cent against 12 per cent. "Robust consumption and investment demand conditions. are helping spark an expansion in output," said Vasan Shridharan, treasury economist at Standard Chartered Bank. "There is no reason why the solid production trend should not be sustained through to the first half of 2000/2001," he said. "The performance augurs well for the government's revenue receipts and secondly it also promises to improve the asset quality of banks."
