Industrial output down by 6%

NEW DELHI, DEC 8: Mirroring the poor offtake and the low demand in the economy, the country's industrial production rate in the first half ...

NEW DELHI, DEC 8: Mirroring the poor offtake and the low demand in the economy, the country’s industrial production rate in the first half (H1) of 1997-98 plummeted to 4.7 per cent as compared to 10.7 per cent during April-September last year.

The downward pressures continued unabated in September when the Index of Industrial Production (IIP) went up by only 2.1 per cent as against a robust 9.4 per cent recorded last year, as per the quick estimates of IIP released by the Central Statistical Organisation (CSO).

The overall decline would have been much sharper but for strong performances by the two major sub-groups electricity and mining which grew by 7.2 and 6.0 per cent respectively during April-September as compared to a growth rate of 2.8 and 1.0 per cent in the last fiscal.

Story continues below this ad

The all-important manufacturing sector, accounting for three-fourth of the total IIP (base:1980-81=100) weightage, grew by just 0.7 per cent in September leading to a cumulative 4.1 growth in the first six months as against a strong 13.6 per cent rate of growth last year.

The data released today revealed another cause for worry as the key capital goods sub-sector continued its poor show and did not post any growth during the first half of this year as compared to the massive 17.3 per cent growth in the last year.

The capital goods segment, which makes up one-sixth the total weightage of the `use-based’ IIP index, continued with a negative growth for the second successive month with September figures touching minus 19.1 from minus 8.4 per cent in August.

From a double digit growth of 10.4 per cent in April-May, this segment showed a sharp deceleration slipping to 6.0 per cent in April-june, 6.5 per cent in April-July and just 3.2 per cent in April-August.

Story continues below this ad

However, there seems to be a remarkable turnaround in the consumer goods segment which has shown a definite acceleration during September with a growth of 10.5 per cent leading to a half-yearly growth of 2.7 per cent this year. This growth is still substantially lower compared to the six-monthly growth of 7.7 per cent recorded by this segment last year. Things are looking brighter in the consumer durables (white goods) sector too with growth in September touching 17.6 per cent as compared to a negative 1.2 per cent last year.

The consumer non-durables goods sector, made up of items like processed foods, grew by a meagre 1.0 per cent during the first-half as against 6.2 per cent during the same period last year. This modest cumulative growth was a result of a high growth rate of 8.2 per cent in the month of September. The basic goods sector, accounting for over two-fifths of the IIP weightage, registered a growth rate of 7.3 per cent compared to 7.9 per cent last year.