Industrial growth recovers...

Showing marked signs of recovery from the lows in the previous two months, industrial growth inched up to 7.1 per cent in July this year on account of an upswing mainly in two sectors — capital goods and consumer durables.

The data on the Index of Industrial Production (IIP) released by the Central Statistical Organisation (CSO) here on Friday revealed that the 7.1 per cent overall growth achieved during the month was lower as compared to the 8.3 per cent increase witnessed in July 2007.

However, even at this level, the heartening signal was that industrial production, at slightly above the seven per cent increase notched up in April, appeared to be back on the recovery path from the low growth of 3.8 per cent in May and 5.4 per cent in June.

Aiding the industrial recovery was the huge growth in capital goods production which surged by a steep 21.9 per cent from 12.3 per cent in July last year.

Alongside, the consumer durables segment, which witnessed a downtrend in production a few months ago, also grew by 11.2 per cent in July this year as compared to a negative growth of 2.7 per cent during the same month last year.

Interestingly, market expectations were for a growth rate of about six per cent in July and while the IIP data may provide a positive cue to trading on the bourses next week, it also partly lessens the Government’s worry over the impact of its inflation-control measures on overall growth.

According to the IIP data, the manufacturing sector that accounts for nearly 80 per cent of the production index grew by 7.5 per cent in July this year as compared to 8.8 per cent a year ago.

While electricity generation went up by 4.5 per cent during the month as against 7.5 per cent in July 2007, the growth in the mining sector was much higher at five per cent against 3.2 per cent.

For the first four months of the current fiscal, the overall industrial growth worked out to 5.7 per cent as compared to a high of 9.7 per cent during April-July 2007-08.

In terms of use-based classification of industries, 10 out of 17 groups witnessed positive growth in July this year.

The beverages, tobacco and related products group posted a robust growth of 28.6 per cent, followed by transport equipment and parts at 18.7 per cent and machinery and equipment at 16 per cent.

Source: The Hindu