India’s industrial production up 4.8 percent in September (Round-up)

November 12th, 2008 - 7:35 pm ICT by IANS  

New Delhi, Nov 12 (IANS) India’s industrial production expanded 4.8 percent in September, which was higher than the poor growth of 1.3 percent in the previous month, but sharply lower than the 7 percent registered during the like month of last fiscal.Data on the official Index of Industrial Production (IIP) released Wednesday showed that cumulative growth during the first six months of this fiscal was 4.9 percent, against 9.5 percent during the corresponding period of last fiscal.

“After the poor results reported for the month of August 2008, the Quick Estimates of Index of Industrial Production for the month of September 2008 are more encouraging,” Finance Minister P. Chidambaram said in a statement.

“I say this even while I maintain that data collection must be improved and made more relevant, contemporary and universal,” he said soon after the ministry of statistics and programme implementation released the fresh data.

The growth during September was particularly low for electricity generation, up 4.4 percent, followed by 4.8 percent for manufacturing and 5.7 percent for the mining sector, the data showed.

The cumulative growth for mining, manufacturing and electricity generation was 3.8 percent, 5.2 percent and 2.5 percent, respectively, for the April-September period.

The use-base classification of the index showed that there was a 9.7 percent decline in the output of wood and wood products in September, even as cotton textiles index also registered a sharp decline of 9.3 percent.

The fast expansion was in transport equipment, up 16.8 percent, followed by 16.1 percent for machinery, 12.8 percent for metal products, 11.7 percent for tobacco and beverages, and 10.5 percent for other manufacturing industries.

In his statement, the finance minister also sought to bring out some positive sides projected by the industrial production numbers for September, notable the 5.6 percent growth in consumer goods against a decline of 0.2 percent last year.

He also said the growth in the capital goods sector was impressive at 18.8 percent, against 20.9 percent in September 2007, while mining out put grew 5.7 per cent, compared with 4.9 percent.

“The 4.8 percent growth rate in manufacturing in September is more encouraging than the growth in August 2008, which was 1.1 percent,” said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (Ficci).

“But this growth is difficult to sustain or pick-up in the coming months in view of the production cuts recently announced by some of the major corporates in real sectors like steel and automobiles and also because of the weakening export demand in sectors like textiles.”

According to the Associated Chambers of Commerce and Industry (Assocham), the small and medium enterprises were facing the brunt of the overall slowdown in industrial production.

“As the cost of finance and raw material gets dearer, it is the small manufacturing firms that witness the pressure most,” said D.S. Rawat, the secretary general of the chamber.

“These companies sell out their stock of goods at cheap prices, thus, their net sales increases but financial statements get weak,” he said in a statement.

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