Logs A Poor 5.4% In June Amid Clouds Of Uncertainty
INDUSTRIAL production grew 5.4% in June 2008, higher than 4.1% (revised) growth in May 2008, but well below the 8.9% figure in June 2007. Industry’s slower pace has stoked apprehensions that the Indian economy’s growth rate could slip below 8% in the current fiscal, thus making a good monsoon all the more important this year.
The index of industrial production (IIP) went up 5.2% in the first quarter of the current fiscal, compared to 10.3% in Q1 2007-08. Growth rates for the first quarter were 4.7% for mining, 2% for electricity and 5.6% for manufacturing.
Mining and electricity grew just 2.9% and 2.6%, respectively, in June while manufacturing registered a growth of 5.9%. The Prime Minister's Economic Advisory Council, it is understood, has pegged growth lower than 8% in its yet-to-be-released outlook for 2008-09.
ICRIER director general Rajeev Kumar said: “I think the monetary policy measures being taken since January this year are beginning to impact the industrial growth. Our GDP growth projection remains at 7.8% as the industrial growth outlook is not very promising.”
Within manufacturing, consumer goods, particularly consumer durables, provided the silver lining, growing faster in June this year than a year ago. While consumer goods grew 10% against 3.6% in June 2007, consumer durables — which had witnessed a negative growth of 3.6% last June — grew 3.5%. Consumer non-durables growth nearly doubled to 12.2% in June 2008 from 6.3% in June 2007. Reduction in excise duty in the Budget and a good monsoon in some parts, it seems, have contributed to the pick-up in demand. Experts, however, are puzzled at the growth numbers in these sectors.
“In coming months, I see the IIP growth figure to hover at around 67%. I am not able to solve the puzzle as to why there is surge in the consumer durable segment. The RBI has been tightening the monetary measures, and credit offtake has come down. In this scenario, I see no reason for surge in consumer durable segment. As for consumer non-durables, the growth must have been aided by good monsoon witnessed in some parts of the country and prospects of a better produce,” said Abheek Barua
INDUSTRIAL production grew 5.4% in June 2008, higher than 4.1% (revised) growth in May 2008, but well below the 8.9% figure in June 2007. Industry’s slower pace has stoked apprehensions that the Indian economy’s growth rate could slip below 8% in the current fiscal, thus making a good monsoon all the more important this year.
The index of industrial production (IIP) went up 5.2% in the first quarter of the current fiscal, compared to 10.3% in Q1 2007-08. Growth rates for the first quarter were 4.7% for mining, 2% for electricity and 5.6% for manufacturing.
Mining and electricity grew just 2.9% and 2.6%, respectively, in June while manufacturing registered a growth of 5.9%. The Prime Minister's Economic Advisory Council, it is understood, has pegged growth lower than 8% in its yet-to-be-released outlook for 2008-09.
ICRIER director general Rajeev Kumar said: “I think the monetary policy measures being taken since January this year are beginning to impact the industrial growth. Our GDP growth projection remains at 7.8% as the industrial growth outlook is not very promising.”
Within manufacturing, consumer goods, particularly consumer durables, provided the silver lining, growing faster in June this year than a year ago. While consumer goods grew 10% against 3.6% in June 2007, consumer durables — which had witnessed a negative growth of 3.6% last June — grew 3.5%. Consumer non-durables growth nearly doubled to 12.2% in June 2008 from 6.3% in June 2007. Reduction in excise duty in the Budget and a good monsoon in some parts, it seems, have contributed to the pick-up in demand. Experts, however, are puzzled at the growth numbers in these sectors.
“In coming months, I see the IIP growth figure to hover at around 67%. I am not able to solve the puzzle as to why there is surge in the consumer durable segment. The RBI has been tightening the monetary measures, and credit offtake has come down. In this scenario, I see no reason for surge in consumer durable segment. As for consumer non-durables, the growth must have been aided by good monsoon witnessed in some parts of the country and prospects of a better produce,” said Abheek Barua
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