Industrial growth story gets better, 13.6 in April

Defying expectations that five increases in lending rates lover the past year would dampen output, industrial growth in April this year stood at a massive 13.6 per cent against 9.9 per cent in the same month last year.

Defying expectations that five increases in lending rates lover the past year would dampen output, industrial growth in April this year stood at a massive 13.6 per cent against 9.9 per cent in the same month last year.

Manufacturing sector led the surge 8212; figures for which were released today in the index for industrial production IIP 8212; expanding by 15.1 per cent in April against the 11 per cent growth in April 2006. Manufacturing, which makes up about 15 per cent of gross domestic product and nearly 80 per cent of industrial output, has the highest weight in the index.

The index also gave revised data for March, showing annual growth of 14.5 per cent instead of a provisional 12.9 per cent. While the mining sector recorded a flat 3.4 per cent growth, there was a slight improvement in the power generation sector, which recorded a 8.7 per cent growth this April against 5.9 per cent in April last year.

Industry chamber CII welcomed the upward trend but said the 8220;decline in growth of consumer durables, basic goods and capital goods is a cause for concern8221;.

Assocham president Venugopal Dhoot said that 8220;if interest rates are brought down considerably and infrastructural facilities put in place, domestic industry can do miracles for double digit growth8221;.

A further break-up shows that 16 out of the 17 industry groups expanded during this April. The industry group 8220;wood and wood products; furniture and fixtures8221; showed the highest growth of 92.2 per cent, followed by 55 per cent surge in in 8220;food products8221; and 19.2 per cent in 8220;machinery and equipment other than transport equipment8221;. Only the segment of 8220;other manufacturing industries8221; showed a negative growth of 5.4 per cent.

Commenting on the industrial growth figures, finance minister P Chidambaram indicated that but for some sectors such as housing and real estate, the government had no intention of enforcing measures that could curb demand.

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8220;The intention is not to constrain demand in every sector8230;the intention is to constrain demand in sectors in which you call overheating exists, for example real estate and housing,8221; he told reporters today.

If one goes by the use-based classification, figures show that there was a dip in the growth of basic goods down from 9.3 per cent last April 2006 to 8.9 per cent this April; capital goods down from 19.6 per cent to 17.7 per cent; and consumer durables down from 7.4 per cent to 5.3 per cent.

But in the same category, there was a phenomenal increase in the growth of consumer non-durables 8212; up from 9.4 per cent to 21.9 per cent. Consumer goods grew from 8.9 per cent to 17.7 per cent, and intermediate goods from 8.5 per cent to 12.6 per cent.