Thaindian News

New Delhi, Feb 12 (IANS) India’s industrial production registered a better-than-expected growth of 16.8 percent in December to log the fastest expansion in a decade, helped by a strong showing by the manufacturing sector that saw its output surge 18.5 percent.
The high growth comes against the backdrop of a 0.2-percent decline registered in the index of industrial production (IIP) in December 2008, as per latest data released by the Central Statistical Organisation

“India’s high industrial output figures show robust economic growth and the economy is likely to do well in the quarter through December,” Finance Minister Pranab Mukherjee said, reacting to the latest numbers.

“We had thought industrial growth may be 13 percent. But it is now just under 17 percent. So the performance is very much in the direction that we expected of a good revival,” added Planning Commission Deputy Chairman Montek Singh Ahluwalia.

“But I don’t expect 17 percent growth to continue month after month — that’s for sure.”

The Reserve Bank of India (RBI) had already revised its forecast for industrial output growth for the current fiscal to 8.4 percent, against 6.3 percent estimated just three months ago because of the impressive recovery staged by the manufacturing sector.

Significantly, as many as 14 out of the 17 industry groups in the index showed positive growth during December, compared to the corresponding month of the previous year, with transport equipment and parts logging the highest growth of 82.2 percent.

Among the broader indices, mining output expanded by 9.5 percent, while electricity generation was up by 5.4 percent, the data showed, bringing cheer to Indian industry after the gloom since the middle of the previous fiscal.

“The 18.5 percent growth of our manufacturing sector in December 2009 is reflective of the acceleration in industrial recovery since August 2009,” said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).

“The robust growth in the consumer durable sector indicates buoyant consumer demand in the market as a result of stimulus packages which needs to be continued for some more months to sustain this industrial growth,” he said in a statement.

With the latest data, the cumulative expansion of the country’s factory output during the first nine months of this fiscal has been 8.6 percent, as against 3.6 percent for the corresponding period of 2008.

The sector-specific indices further indicate a 7.5-percent growth in basic goods during December, 38.8 percent in capital goods, 21.7 percent in intermediate goods, 46 percent in consumer durables and 3.7 percent in consumer non-durables.