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12 April 2013

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Industrial output Factory production IIP Indian economy PMI

Industrial output growth slows to 0.6% in February

Mining sector contracts 8.1%, while manufacturing shows signs of revival with growth of 2.2%

Asit Ranjan Mishra

First Published: Fri, Apr 12 2013. 11 17 AM IST

In April-February, growth in the index of industrial production slowed to 0.9% from 3.5% a year ago. Photo: Ramesh Pathania/Mint

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Updated: Fri, Apr 12 2013. 12 14 PM IST

New Delhi: India’s factory output grew 0.6% in February, slowing from 2.4% expansion in January and signalling that economic recovery has yet to take firm root.

Mining contracted 8.1%, while manufacturing showed signs of revival with a growth of 2.2%. However, electricity production, which has been registering robust growth, contracted 3.2%, indicating that the myriad constraints faced by the sector may be eroding its health.

In April-February, the index of industrial production (IIP) slowed to 0.9% from 3.5% a year ago.

In February, while capital goods grew 9.5%, basic goods contracted 1.8%, intermediate goods shrank 0.7% and consumer durables by 2.7%. The consumer non-durables sector grew 2.9% during the month.

The Organisation for Economic Cooperation and Development said on Wednesday that while economic growth in large economies such as the US, Japan, Germany and China is set to pick up in the coming months, India continues to slow down.

The Asian Development Bank (ADB), in its Asian Development Outlook released on Tuesday, said India’s growth will pick up to 6% in 2013-14, slower than the government’s forecast of 6.2-6.7%. Economic growth for 2012-13 is estimated at 5%, the slowest in a decade.

ADB said while an anticipated good monsoon and a pick-up in rural consumption will boost growth, structural reforms are necessary to revive investment demand and tackle the rising current account deficit.

ADB expects the Reserve Bank of India to further ease monetary policy in 2013-14, but said the extent of this relaxation will depend on progress in reducing the current account and budget deficits.

In the fiscal year ended 31 March, car sales fell 6.7%, the first drop in 12 years. The Society of Indian Automobile Manufacturers (SIAM) lobby group expects car sales to pick up 3-5% in 2013-14.

The World Trade Organization slashed its forecast for global trade growth in 2013 on Wednesday, saying it feared protectionism was on the increase. It cut the forecast for global trade growth in 2013 to 3.3% from 4.5% and said this was just 2% in 2012. That was the smallest annual rise since WTO started keeping such records in 1981 and the second weakest figure on record after 2009, when trade shrank.

n for Economic Cooperation and Development said on Wednesday that while economic growth in large economies such as the US, Japan, Germany and China is set to pick up in the coming months, India continues to slow down.    

gaurav singh tomar

pgdm 2nd sem