Industrial growth still weak, to improve in second half: Rajan
The Reserve Bank Wednesday said the 2 percent industrial growth in September is disappointing, but hoped that the economic situation would improve in the second half of the fiscal on the back of good monsoon and exports.
Mumbai: The Reserve Bank Wednesday said the 2 percent industrial growth in September is disappointing, but hoped that the economic situation would improve in the second half of the fiscal on the back of good monsoon and exports.
"Yesterday's data suggested still weak growth as the IIP numbers came below expectations...The IIP numbers have disappointed a little, partly because of the volatile capital goods sector," RBI Governor Raghuram Rajan said at press meet.
The Index of Industrial Production (IIP) rose 2 percent from a dismal 0.43 percent in August, mainly on account of better output of the power and mining sectors.
Rajan said: "I am still hopeful that the good monsoon and the associated pick up in consumption, the very healthy exports, and the strong growth in the power sector should lead to stronger growth numbers for the second half of the fiscal year".
The government will release the GDP (Gross Domestic Product) data for the second quarter later this month.
India's economic growth has slowed to a four-year low of 4.4 percent due to various global and domestic factors.
Last month, the Reserve Bank had lowered its growth projection for the country to 5.5 percent from the earlier estimate of 5.7 percent.
Earlier, the RBI said that industrial activity has weakened, with a contraction in consumer durables and tepid growth in capital goods reflecting the ongoing downturn in both consumption and investment demand.
Various external agencies like the IMF and the World Bank have lowered their growth projections for India pegging the economic expansion rate between 4.3-5.9 percent.