The Hindu : Business : Inflation down, industrial growth up

Online edition of India's National Newspaper
Saturday, Dec 11, 2004

Business

Business

Inflation down, industrial growth up

By Our Special Correspondent

NEW DELHI, DEC. 10. Two macro-economic indicators reported good performance on Friday. While the inflation rate for the week ended November 27 recorded a marginal fall to 7.3 per cent from 7.34 per cent for the previous week, the industrial sector registered an impressive growth of 10.1 per cent in October.

In fact, the inflation rate could have come down further as there has been a sharp 12 per cent fall in vegetable prices but manufactured products became costlier due to higher prices of diesel that forms the bulk of transportation costs. The inflation rate a year ago was 5.49 per cent.

On the industrial front, the 10.1 per cent growth in October has taken the overall Index of Industrial Production (IIP) for April-October 2004 to 8.4 per cent, significantly higher than 6.2 per cent recorded in the same months of last year. The spurt has been brought about mainly by the manufacturing sector, which saw a growth of 11.3 per cent in October, up from 7.1 per cent in the same month last year.

Mining was up 4.7 per cent, up from 2.4 per cent, while electricity generation was also higher at 3.8 per cent (2.6 per cent).

For the entire April-October period, mining was up 5 per cent from 3.9 per cent in the previous year, manufacturing grew by 8.8 per cent (6.8 per cent) and electricity generation by 7.1 per cent (2.9 per cent). The overall IIP spurted to 8.4 per cent from 6.2 per cent.

Data on use-based industrial production show that basic goods production was up 6.8 per cent in October this year against 4.3 per cent in the same month of last year, capital goods by 19.2 per cent (4.9 per cent), intermediate goods by 8.7 per cent (6.5 per cent) and consumer goods by 14.8 per cent (8.8 per cent).

In this segment, consumer durables were up 15.5 per cent (13 per cent) and consumer non-durables by 13.4 per cent (7.2 per cent).

Corresponding data for April-October 2004 show that basic goods production was up 5.4 per cent against 4.3 per cent, capital goods by 15.1 per cent (9.2 per cent), intermediate goods by 7.6 per cent (5.2 per cent) and consumer goods by 10 per cent (8.4 per cent).

Consumer durables were up 15.9 per cent (7.7 per cent) and consumer non-durables by 8.1 per cent (8.6 per cent).

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