August IIP growth drops sharply to 0.6

Factory output in August slowed to 0.6 per cent on weak consumption demand coupled with shrinking manufacturing and mining activities.

The index of industrial production IIP grew 2 per cent during the same period a year ago,according to data released by the government on Friday. In July,it had grown 2.8 per cent,revised upwards from 2.6 per cent.

The manufacturing sector,with a weight of over 75 per cent in the index,contracted 0.1 per cent in August as against a growth of 2.4 per cent in the year-ago period while the mining sector shrank 0.2 per cent as against a contraction of 0.3 per cent during the year-ago period.

Capital goods production,a barometer for investments,contracted by 2 per cent during the month from a contraction of 4.4 per cent during the year-ago period.

The only exception was electricity generation,which increased by 7.2 per cent in August as compared to 1.9 per cent during the same period a year ago. For the April-August period,the growth in IIP was 0.1 per cent as against 0.2 per cent during the same period a year ago.

What is especially discouraging is the sharp decline in output of all sub-sectors-manufacturing and mining 8211; which continue to be under stress owing to a spate of inhibiting factors such as high interest rates,flagging investments,policy bottlenecks and subdued demand conditions, industry chamber CII said in a statement.

Expect industrial output growth to improve in H2 FY14: PMEAC

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New Delhi: Prime Ministers Economic Advisory Council PMEAC chairman C Rangarajan on Friday expressed the hope that Indias industrial output growth will pick up in the second half of the current fiscal year.

I see improvement in IIP numbers coming along as we go further during the year. I am hoping a better performance in the second half of the year, Rangarajan said. As per the data released by the government,IIP for April-August worked out to be 0.1 per cent compared with 0.2 per cent in the same period of 2012-13 financial year. PTI