The Hindu Business Line : Electricity, mining propel July industrial growth 12.4%

Good show
Manufacturing sector grew 13.3 per cent
Consumer goods output rose sharply by 17.9 per cent
Basic goods posted 10 per cent growth

New Delhi , Sept. 12

July saw the country's industrial growth surging by 12.4 per cent against a 4.7 per cent growth in the same month last year. The spurt came about mainly because of strong pick-up in the electricity and mining sectors.

A smart increase in consumer goods output also helped catapult industrial growth in that month. Electricity and mining sectors clocked growth rates of 8.6 per cent and 6 per cent, respectively, in July this year. In the same month last year, mining output had declined by 1.9 per cent and electricity generation dipped by 0.9 per cent.

The manufacturing sector, which had a weightage of over 79 per cent in the index of industrial production (IIP), recorded growth of 13.3 per cent as against 6 per cent in July 2005.

In terms of use-based classification, consumer goods output recorded a sharp increase of 17.9 per cent (4.5 per cent). Output of basic goods registered a smart growth of 10 per cent (3.4 per cent).

For the April-July period, industrial growth increased by 10.6 per cent as compared to growth level of 8.9 per cent in the same period last year.

No pressure on rates seen

Reacting to the industrial growth performance, the Finance Minister, Mr P. Chidambaram, told presspersons that the "happy part" was that the mining and electricity sectors, which were laggards last year, had picked up strongly.

The Finance Minister also said that he did not see the rapid expansion in industrial output exerting pressure on interest rates. Citing the Reserve Bank of India data, Mr Chidambaram said that non-food credit has grown by 33 per cent.

"Credit growth is very good. There is ample liquidity. Call rates are moderate. While credit growth is high, I don't see that (high industrial growth) necessarily exerting any pressure on the interest rates", he said.

On the manufacturing sector, he said that segments such as textiles, man-made fibre, paper, basic chemicals, and transport have all recorded good growth. Mr Chidambaram also said that high manufacturing growth would continue if commodity prices were to come down.

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