Business Daily from THE HINDU group of publications
Saturday, Dec 13, 2008
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Saturday, Dec 13, 2008 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Economy Industrial decline may be steeper, says CMIE Our Bureau New Delhi, Dec. 12 The Centre for Monitoring Indian Economy (CMIE) is ‘sceptical’ about the latest Index of Industrial Production (IIP) data for October, showing an overall decline of 0.4 per cent year-on-year and 1.2 per cent in the case of manufacturing. “My hunch is that the decline might be much steeper than what the IIP data suggests,” said Mr Mahesh Vyas, Managing Director of the Mumbai-based independent economic database company and think-tank. Creaky weightagesMr Vyas said his scepticism was rooted in the fact that the base year and commodity-wise weights used in the construction of the IIP went back to 1993-94. The industrial structure of the country has undergone considerable change in the last 15 years, which is not adequately captured by the official data. “Besides old base year and weights, the Government’s data collection machinery is creaky, which makes me further sceptical,” Mr Vyas told Business Line. He noted that for the April-September period, the annual growth in the IIP was estimated at 4.9 per cent. On the other hand, CMIE’s data base of companies revealed a 35 per cent year-on-year increase for the same period. “If you adjust for inflation, the industrial growth figure would have worked out to around 15 per cent in real terms. The IIP data was probably underestimating the extent of growth,” he pointed out. It is just the other way round now in October where the IIP data could be underestimating the extent of negative growth. “A clearer picture will emerge when companies report their sales figures for the October-December quarter. My feeling is that the decline would be much steeper than what the IIP data will bring out,” Mr Vyas added. Mining boosts IIP in April IIP numbers resurrect concerns for India Inc Does the IIP offer clues to corporate growth? More Stories on : Economy
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