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A sharp dip in manufacturing sector growth and negative growth in mining pulled down the country's industrial production growth to 1.8 per cent in December 2011.
Factory output growth was much lower than the 8.1 per cent recorded in the same month last year.
The Index of Industrial Production (IIP) grew 5.9 per cent last November. This estimate has now been revised upward to 5.94 per cent.
Terming the latest IIP numbers “disappointing”, the Finance Minister, Mr Pranab Mukherjee, hoped industrial output would improve in the current quarter.
Between April and December 2011, the IIP has registered 3.6 per cent growth, lower than the 8.3 per cent expansion in the same period the previous year.
The manufacturing sector, which accounts for over 75 per cent of the index, grew 1.8 per cent in December, much lower than the 8.7 per cent growth in December 2010, official data released on Friday showed.
Hopes of revival
Mining output registered negative growth of 3.7 per cent in December 2011, against 5.9 per cent in same month last year.
On a cumulative basis, mining output registered a negative growth of 2.7 per cent in April-December 2011, against 6.9 per cent in same period last year.
Power generation in December 2011 grew 9.1 per cent (5.9 per cent). In April-December 2011, power generation recorded 9.4 per cent growth (4.6 per cent).
Dr C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, also said the IIP numbers were disappointing and hoped investment sentiment would improve in the coming days.
“There are indications of a revival of factory output in January-March as the mining sector is expected to show improvement, as coal output is expected to rise”, Dr Rangarajan said.
He said the country's economic growth in the current fiscal was likely to be a shade better than the 6.9 per cent forecast by the Central Statistics Office recently.
‘Bottoming-out' quarter
The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, expressed hope that industrial output growth would pick up in the January-March quarter. “I thought the third quarter would be a kind of bottoming-out quarter. We have to see whether that really works out,” he said.
On use-based classification, the capital goods sector witnessed a contraction of 16.5 per cent against a growth of 20.2 per cent in the same month in 2010. Output of basic goods went up 4 per cent against 7.8 per cent.
However, intermediate goods contracted 2.8 per cent, against 8.1 per cent growth in December 2010.
Consumer goods output recorded robust 10 per cent growth in December 2011 against 3.5 per cent growth in same month last year.
While consumer durables output grew 5.3 per cent (7.8 per cent), consumer non-durables recorded growth of 13.4 per cent (0.6 per cent).
krsrivats@thehindu.co.in
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