Thaindian News

New Delhi, June 10 (IANS) India’s industrial production grew at a much slower 6.3 percent in April as per the new series compared to 13.1 percent in April 2010, according to official data released Friday.

The new series will now compute the index of industrial production (IIP) keeping 2004-05 as the base year. The earlier series had 1993-94 as the base.

As per the old series, the IIP growth came in at a much slower 4.4 percent. It had grown by 16.6 percent in April 2010 going by 1993-94 as the base.

Finance Minister Pranab Mukherjee termed the figures “disturbing”.

“The IIP growth figures are disturbing. But we need to wait for longer term IIP growth to see the trend,” Mukherjee told reporters here.

The dip in industrial output had a negative impact on Indian equities markets with a benchmark index of the Bombay Stock Exchange, the 30-scrip sensitive index (Sensex) falling over 200 points to an intra-day low of 18,182.9 points.

As per the new series, manufacturing, which constitutes about 80 percent of the IIP, grew at a rate of 6.9 percent in April compared to 14.4 percent last year, while mining increased by 2.2 percent as against 9.2 percent in April 2010, according to the statement from the ministry of statistics and programme implementation.

Electricity generation rose 6.4 percent during the month under review.

Consumer goods output was sluggish at 2.9 percent, compared to 13.8 percent in April 2010, while consumer durables production slowed to 3.8 percent as against a whopping 23.3 percent in the like month of last year.

“On the back of IIP reading of 7.3 percent for March 2011, which had surprised the market on the upside, the release for April 2011 data at 4.4 percent (as per old series) is below expectation of about 5.5 percent,” said Sudhakar Shanbhag, chief investment officer, Kotak Mahindra Old Mutual Life Insurance Ltd.

In terms of industries, 16 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month of April 2011 as compared to the corresponding month of the previous year.

For the year 2010-11, IIP grew 8.2 percent over the corresponding period of the previous year.

The Reserve Bank of India will be keenly watching the industrial output scenario, although it has said it would focus on curbing inflation even if it means sacrificing some growth in the short-term.

“The degree of slowdown in growth would have implications on RBI’s rate increase plans. Though currently the bias is to control inflation, there would be a close watch on growth numbers as well since the tightening over the last 12 months will start showing impacts now and over the next few quarters,” said Shanbhag.