The Hindu Business Line : Industrial growth at 8-yr high in 2003-04

THE NDA Government can end its tenure with satisfaction that the country's industrial output registered an increase of 6.9 per cent during 2003-04, making it the best ever growth performance in the last eight years.

Just for the record, the previous time that industry grew by a heady 13 per cent was in 1995-96, which coincidentally was the last year of the Congress Government of Mr P.V. Narasimha Rao.

The 6.9 per cent overall industrial growth for 2003-04 is higher than the corresponding 5.7 per cent figure for the previous fiscal.

Further, two out of the three main sectors constituting the official Index of Industrial Production (IIP) have recorded higher growth rates: manufacturing at 7.2 per cent (six per cent) and electricity at five per cent (3.2 per cent).

Only the mining and quarrying sector has shown a lower growth of 5.1 per cent compared to 5.8 per cent for 2002-03.

During the latest recorded month of March 2004, industry as a whole has grown by 6.7 per cent on a year-on-year basis (against 5.9 per cent in March 2003), with the corresponding figures at 6.7 per cent (6.4 per cent) for manufacturing, 3.8 per cent (7.6 per cent) for mining and 10.1 per cent (minus 0.6 per cent) for electricity.

The `use-based' classification of the IIP reveals further good news for any new Government that assumes office.

Production of capital goods - which is a reliable proxy for investment activity taking place in the economy - has gone up by 12.7 per cent during 2003-04, on top of the 10.5 per cent growth for 2002-03.

What is more, the momentum has been sustained in March as well, with growth at 17 per cent against 10.4 per cent for the same month of the preceding year.

Among other use-based sectors, the growth rates during 2003-04 stood at 5.4 per cent (4.9 per cent in 2002-03) for basic goods, 6.2 per cent (3.9 per cent) for intermediate goods, 11.6 per cent (minus 6.3 per cent) for consumer durables and 5.7 per cent (12 per cent) for consumer non-durables.

For March 2004, production of basic goods registered a 5.7 per cent year-on-year increase (compared to 4.6 per cent in March 2003), with the corresponding growth rates being 4.5 per cent (eight per cent) for intermediate goods, 20.3 per cent (minus 12.2 per cent) for consumer durables and 2.4 per cent (9.3 per cent) for consumer non-durables.