Jan IIP rises to 2.4%; pressure mounts on RBI to cut rates
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Jan IIP rises to 2.4%; pressure mounts on RBI to cut rates

Last Updated: Wednesday, March 13, 2013, 09:17
 
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Jan IIP rises to 2.4%; pressure mounts on RBI to cut rates
New Delhi: After declining for two months in a row, industrial output in January grew by 2.4 percent, showing signs of recovery on account of better performance of manufacturing and power sectors even as pressure mounted on RBI to cut interest rates to spur growth.

Not impressed by fragile indications of recovery, Finance Ministry and India Inc sought to impress upon the Reserve Bank to lower interest rates next week to boost industrial growth.

The factory output, as measured by the Index of Industrial Production (IIP) had grown by 1 per cent in January, 2012. It had contracted by 0.8 percent in November and 0.5 percent in December.

"Inflation numbers have also come down so there is certainly a case for (giving) further impulses for growth," Department of Economic Affairs (DEA) Secretary Arvind Mayaram told reporters here.

RBI has forecast the March-end WPI inflation to be 6.8 percent. For January, it was 6.62 percent.

Mayaram said the central bank will take into account various developments and macro economic conditions before taking a view on interest rate at its mid-quarter review of monetary policy on March 19.

Industry chamber CII said that RBI should respond to the fiscal consolidation measures announced in the budget by Finance Minister P Chidambaram and reduce policy rates by at least 50 basis points in its forthcoming policy review.

As per the IIP data, the industrial production has recorded an increase of 1 percent during the 10-month period (April-January 2012-13), down from 3.4 percent in the same period of 2011-12.

Meanwhile, the decline in industrial output for December 2012 has been revised slightly upward to 0.5 percent from a contraction of 0.6 percent as per provisional estimates released last month.

According to the data, manufacturing sector, which constitutes over 75 percent of the index, grew by 2.7 percent in January, as against 1.1 percent in the same month of 2012.

Growth in the output of the key sector remained low at 0.9 percent in the April-January period this fiscal, as against 3.7 percent in the same period in 2011-12.

Power generation has increased by 6.4 percent in January compared to 3.2 percent growth in January, 2012.

During the April-January period, electricity generation has gone up by 4.7 percent, compared to a growth of 8.8 percent in the same period in the last fiscal.

Commenting on the IIP data Chief Economist, India Ratings D K Joshi said: "Well, I will be bit cautious. It is still not a trend. IIP numbers have been volatile. It is not likely that next month also exports will be inching up, it may be weak. But I would say it is positive."

Overall, 11 of the 22 industry groups in manufacturing sector have shown positive growth during January, as compared to the same month last year.

The mining output in January this year contracted by 2.9 per cent, compared to a decline in production by 2.1 percent in the same month in 2012.

For the April-January period, the production in the sector showed a declined of 1.9 percent, against contraction of 2.5 percent in the year-ago period.

Capital goods output was down 1.8 percent in January, as against a contraction of 2.7 percent in same month of 2012.

Capital goods output also contracted in the April-January period by 9.3 percent, as against a dip of 2.9 percent in the same period of 2011-12.

However, the consumer goods output saw a growth of 2.8 percent in January, compared to 2.5 percent in same month last year.

In the April-January period of this fiscal, the growth in this segment was 2.7 percent as compared to 5.4 percent in the same period of 2011-12.

The dip in the output of consumer durables stood at 0.9 percent in January, as compared to a contraction of 7.5 percent in the same month of 2012.

The growth in the output of these goods was at 3.2 percent in April-January period of the current fiscal, compared to 3.7 percent in same period in 2011-12.

The consumer non-durables output grew by 5.3 percent in January, compared to 10.6 percent in the same month last year. This segment grew by 2.3 percent in the 10-month period of this fiscal, as against 6.6 percent last fiscal.

The intermediate goods production also saw a growth of 2 percent in January, compared to a decline in output by 2.5 percent in same month last year.

During the April-January period, this segment recorded a growth of 1.7 percent, compared to a contraction of 0.8 percent in the first 10 months of last fiscal.

PTI



First Published: Tuesday, March 12, 2013, 11:27


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