The Hindu Business Line : Inflation is down, but so is industrial output<br>January sees some growth

New Delhi, March 12 Industrial output showed a dip for the second month in a row, the decline being 0.5 per cent in January 2009. Led by a continuing downturn in the manufacturing and mining sectors, the overall output was marginally better than the minus 0.63 per cent clocked in December.

January’s numbers, however, were way below the 6.2 per cent year-on-year rise in output clocked in the same month of 2007-08.

For the first ten months of the current fiscal, industrial growth was recorded at three per cent (versus 8.7 per cent during April-January 2007-08), putting a question mark on the official projection of 7.1 per cent GDP growth for 2008-09.

Official advance estimates had pegged industrial growth at 4.8 per cent for the current fiscal.

The January data show that while the performance of intermediate and basic goods had been disappointing, there had been an encouraging turnaround in the capital goods and consumer goods sectors.

According to the latest official Index of Industrial Production (IIP) data released here on Thursday, the overall growth in manufacturing output, which has a weight of around 80 per cent in the IIP, declined by 0.8 per cent and mining production by 0.4 per cent .

However, electricity generation rose, though at a slower pace of 1.8 per cent against 3.7 per cent a year ago.

Food products

In terms of specific industries, 12 out of the 17 sectors showed a decline in growth in January.

The biggest dip in production, at 16.1 per cent, was witnessed in the case of food products, followed by wood and wood products (15.2 per cent) and transport equipment and parts (13.4 per cent).

Among those recording a growth, the production of machinery and equipment other than transport was up 17.5 per cent.

Other positives to the industrial story include consumer goods, particularly durables, which showed a growth after a long time.

Consumer durables and non-durables recorded a growth of 2.5 per cent and 0.7 per cent respectively , with the overall growth in consumer goods sector being 1.1 per cent.

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