Tags:
Journalism of Courage
Industrial production grew at a slower clip in April as softer domestic demand and power shortages weighed on factory output.
The index of industrial production (IIP) growth in April slowed to 2 per cent year-on-year,as against an upwardly revised 3.4 per cent growth in March,increasing the clamour for rate cut by the RBI and faster project clearances to boost investments. During April last year,factory output had witnessed a contraction of 1.3 per cent.
The IIP averaged 1 per cent in fiscal 2012-13 amid sluggish manufacturing growth and contraction in coal production.
While mining continued to contract at 3 per cent in April,manufacturing grew 2.8 per cent and electricity production rose 0.7 per cent.
Data released separately by the statistics ministry showed retail inflation decelerated marginally to 9.31 per cent in May compared to 9.39 per cent a month ago.
Aditi Nayar,senior economist at ICRA Ltd said the industrial growth data for April 2013 offered no definitive signs of a broad-based improvement.
Sharply lower growth of capital goods in April 2013 following two months of 9 per cent expansion reflects weakness in a number of sub-sectors of machinery and equipment,in line with the sluggish near-term outlook for investment activity, she said.
Reacting to the numbers,Leif Lybecker Eskesen,Chief Economist for India and ASEAN at HSBC said: Growth is likely to remain slow in coming months as it takes time for the reforms to kick in. Moreover,the reform momentum could slow. Finally,external weakness is likely to linger for a while still.
Describing the IIP in April as disappointing,Planning Commission Deputy Chairman Montek Singh Ahluwalia said,The growth rate that has come out today is low…there is a slight upturn,but its not strong enough.
The manufacturing sector,which constitutes over 75 per cent of the index,grew by a meagre 2.8 per cent in April. In the same month last year,it had declined by 1.8 per cent.
Power generation grew by just 0.7 per cent in April compared to a growth of 4.6 per cent in same month last year.
The mining sector output contracted by 3 per cent in April this year compared to a decline in the production by 2.8 per cent in April 2012.
Capital goods output saw a growth of just 1 per cent in April,compared to a decline in production by 21.5 per cent in the year-ago period.
