Date:13/02/2008 URL: http://www.thehindu.com/2008/02/13/stories/2008021355131700.htm

Business

Industrial growth slips to 7.6 p.c. in Dec.

Special Correspondent

Deceleration across sectors

NEW DELHI: The growth in industrial production slumped to 7.6 per cent in December last year from 13.4 per cent in the same month in 2006, mainly owing to a sharp deceleration spread across various sectors such as manufacturing, mining, electricity and consumer goods.

According to the quick estimates of the Index of Industrial Production (IIP) released here on Tuesday, apart from the consumer goods segment in the manufacturing sector, the other segments such as basic and capital goods contributed to the slippage in production growth. The prime culprit responsible for the deceleration in growth during the month was the manufacturing sector which witnessed a slippage in growth to 8.4 per cent from a high 14.5 per cent achieved during the same month of 2006.

Alongside, the other major sectors, namely mining and electricity, also fared poorly to post growth rates of three per cent and 3.8 per cent, respectively during December 2007 as compared to 6.1 per cent and 9.1 per cent in the same month a year ago. Accordingly, the cumulative industrial growth rate for the nine-month period (April-December 2007) of the current fiscal also slipped over two notches to nine per cent from 11.2 per cent recorded during the same period of 2006-07.

Under the circumstances, it appears highly unlikely that the growth rate in industrial production during 2007-08 will manage to cross the double-digit mark. For the nine-month period, manufacturing sector growth slipped to 9.6 per cent from 12.2 per cent in the previous year. The growth rates for mining and electricity during the period settled at 4.9 per cent 6.6 per cent, respectively as compared to 4.4 per cent and 7.5 per cent in the same period of 2006-07.

As for the consumer goods sector, its growth rate declined to 8.7 per cent in December 2007 from 10.7 per cent in the same month a year ago.

The growth in consumer non-durables declined to 10.6 per cent from 13.5 per cent as the consumer durables segment showed a slight upside to 2.2 per cent from 1.8 per cent in December 2006. A marked decline was in basic goods with its growth rate slipping to 3.1 per cent during the month from a high of 12.4 per cent in December a year ago.

The industrial growth rate for November 2007, meanwhile, has also been scaled down to 5.1 per cent from 5.3 per cent estimated earlier.