Industrial output is expected to grow by 5.1 per cent in FY 13, which is higher than last year but below the seven-year average, an economic think-tank said here.
“We expect the year 2012-13 to be below average for the Indian industry in terms of production growth. The index of industrial production (IIP), which is the official measure of industrial growth in India, is expected to rise by 5.1 percent in FY 13,” Centre for Monitoring Indian Economy (CMIE) said in its monthly review.
This will be much slower than the average annual growth of 7.9 per cent posted by the index between its base year 2004-05 and 2011-12. However, the growth will be much higher than the 2.9 percent growth posted by IIP in 2011-12, it said.
CMIE expects that the projected growth in industrial output will be driven by a strong 10.4 percent growth in electricity generation, whereas output of manufacturing sector and mining and quarrying sector is expected to grow by 4.3 percent and 3.7 percent respectively.
The growth in electricity sector will be the highest one seen in power generation in last 23 years. The growth will be driven by a sharp 11.9 percent rise in thermal power generation. We expect the availability of coal to improve in FY 13 with a 6.8 percent rise in production and a strong 28.3 rise in coal imports, This, coupled with the record capacity addition seen in the last year will accelerate the growth in thermal power generation in FY 13, CMIE said.
The nuclear power generation is expected to grow by 17.1 percent, backed by the 2,000 MW capacity addition by Nuclear Power Corporation. Hydel power generation, however, is expected to remain flat because of poor rainfall and low reservoir levels, according to the review.