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Industrial growth slumps further to 1.9 pc in May

Our Bureau

NEW DELHI, July 13

THE country's industrial growth has slumped further to 1.9 per cent in May, following a dismal growth rate of 3.3 per cent for April.

According to the Central Statistical Organisation's (CSO) quick estimates of the Index of Industrial Production (IIP) released here on Thursday, overall industrial production during April-May 2001 stood at a mere 2.6 per cent, compared to 6.2 per cent fo r April-May 2000.

Among the three major constituents of the general IIP, the index for manufacturing (79.36 per cent weight) rose by only 2.6 per cent in April-May 2001 (as against 6.6 per cent in April-May 2001), while the growth rate for electricity (10.17 per cent weig ht) amounted to 2.2 per cent (5.1 per cent).

Only the mining sector (10.47 per cent weight) recorded a marginally higher growth of 3.8 per cent in the first two months of the current fiscal, compared to last year's corresponding level of 3.3 per cent.

For the latest recorded month of May 2001, the growth rates stood at 1.9 per cent for the general index, 1.6 per cent for manufacturing, 2.8 per cent for electricity and 4.1 per cent for mining. The corresponding figures for May 2000 were 6 per cent, 6.2 per cent, 6.4 per cent and 2.6 per cent respectively.

The `use-based' classification of the IIP shows that the lower industrial growth has primarily been on account of the decline in capital goods production, which, in turn, is indicative of the absence of any significant domestic investment sentiment.

Capital goods output fell by two per cent during April-May 2001 as against a growth of 6.4 per cent in April-May 2000, with the corresponding growth figures for May 2001 and May 2000 being -0.9 per cent and 3.1 per cent, respectively.

During April-May 2001, the growth rates were lower even for basic goods (2.8 per cent as against 5.5 per cent for April-May 2000), intermediate goods (2.1 per cent versus 4.5 per cent), consumer durables (6.4 per cent versus 22 per cent) and consumer non -durables (3.7 per cent versus 4.4 per cent). Thus, even the consumer durables sector, which appeared relatively insulated from the general recessionary trends, has lost its earlier buoyancy.

For May 2001, the growth figures for basic goods amounted to 2.4 per cent (compared to 6.1 per cent in May 2000), while standing at 1.2 per cent (3.3 per cent) for intermediate goods, 6.2 per cent (27.5 per cent) for consumer durables and 1.9 per cent (3 .7 per cent) for consumer non-durables.