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Industrial growth halves to 5.2% in April-June

NEW DELHI: A continuing slowdown in manufacturing pulled down the overall growth in industrial production to almost half at 5.2 per cent in April-June this fiscal from 10.3 per cent during the first quarter of 2007-08.

The official data on the Index of Industrial Production (IIP) released here on Tuesday revealed that industrial growth in June also witnessed a slump to 5.4 per cent from a high 8.9 per cent growth posted during the same month a year ago even as the consumer sector defied the trend and pulled back with a growth of 10 per cent.

In the wake of costlier credit owing to rising interest rates, which is part of the monetary recipe to rein in inflation, the growth in manufacturing slipped sharply to 5.9 per cent in June from 9.7 per cent recorded in the same month last year.

The growth in electricity generation declined to 2.6 per cent in June from 6.8 per cent during the same month in the previous year while the mining sector bounced back with a growth of 2.9 per cent from 1.5 per cent.

Bucking the downtrend, however, was the consumer goods sector which signalled a revival with the durables segment coming out of negative growth. Against a negative growth of 3.6 per cent in June 2007, the sector gathered momentum to notch up a growth of 3.5 per cent in June this year.

During June, the performance of the consumer non-durables segment was even better as it recorded a growth of 12.2 per cent during the month as compared to 6.3 per cent in June 2007.

The consumer goods sector, as a whole, thus posted a first quarter growth of 8.5 per cent as compared to nine per cent in the same period a year ago.

As for capital goods, the sector grew by a mere 5.6 per cent in June as compared to 23.1 per cent recorded in the same month last year.

According to the revised data, the growth in the IIP was 4.19 per cent in May against 10.6 per cent a year ago and 6.2 per cent in April against 11.3 per cent in 2007.

In a clear sign of slowdown, as revealed by the downtrend in industrial production, the growth in the six core infrastructure industries slipped to 3.4 per cent in June this year from 5.2 per cent in the same month a year ago, mainly owing to the dismal shows by all the other five sectors, except coal.

For the April-June quarter of 2008-09 also, the growth of the six core industries — crude oil, petroleum refinery products, cement, finished steel, coal and electricity — slumped to 3.5 per cent from 6.4 per cent during the same quarter of the previous fiscal, the data reveal.

According to the official data released here on Tuesday, it was only the coal sector that bucked the declining trend with a growth of 6.2 per cent as compared to the 0.9 per cent growth recorded in the year-ago period.

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