At 6.8% in Jan,IIP records fastest growth in 7 months

* Jump aided by sharp upturn in consumer non-durables sector production

Written by ENS Economic Bureau | New Delhi | Published: March 13, 2012 1:39:05 am

The country’s factory output sprang a surprise by registering a robust 6.8 per cent during January — a seven-month high — aided by a sharp upturn in consumer non-durables sector production.

The factory output,as measured by the index for industrial production (IIP),clocked a better-than-expected growth despite the fact that the eight core sector industries,which form a significant 37.90 per cent of the overall index,had grown by just 0.5 per cent during the same month.

Coming just before the Reserve Bank of India’s monetary policy review on March 15,the upsurge in the January IIP numbers have doused the hopes of a much-awaited rate cut by the central bank. The IIP during January 2011 had recorded a 7.5 per cent growth on a year-on-year basis,while it rose 1.8 per cent during December.

According to the figures released by the ministry of statistics and programme implementation (MoSPI),the manufacturing sector,which makes up for 75 per cent of the IIP,grew by 8.5 per cent in January as against 8.1 per cent during the same period a year ago. Manufacturing had surged by 1.8 per cent in December 2011. Finance Minister Pranab Mukherjee said the data showed a “strong recovery in the backdrop of last December’s figure…”

During the latest month,electricity generation was up 3.2 per cent. Mining output contracted by 2.7 per cent in January as against 1.7 per cent growth in the year ago period,led mainly by coal and gas production woes. Consumer non-durables such as food products grew by 42.1 per cent during the month as against a mere 5 per cent during the same period a year ago. Consumer goods also posted a strong 20.2 per cent growth,as against 8.3 per cent during the same month last year. The capital goods segment — a pointer to fresh investments — continued its bad showing and contracted 1.5 per cent in January,as against a growth of 5.3 per cent in the same month last year.

As regards the specific sectors,the finance minister said there is not much progress in capital goods,which is a matter of concern. “Consumer non-durable had contributed substantially in this growth,but not so much in consumer durables. In course of time,efforts will have to be made to build up these areas.”

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