'IIP figures disappointing, need for positive signals'
Expressing disappointment over dismal 0.1% industrial growth rate in April, finance minister Pranab Mukherjee today said the government would take steps to give positive signals to the industry.business Updated: Jun 12, 2012 21:14 IST
Expressing disappointment over dismal 0.1% industrial growth rate in April, finance minister Pranab Mukherjee on Tuesday said the government would take steps to give positive signals to the industry.
"I am disappointed. Industry has not yet picked up. Negative sentiments are there... We have to take steps to give positive signals (to the industry)," he told reporters in New Delhi.
Industrial production growth rate slowed down sharply to 0.1% in April from 5.3% a year ago, due to contraction in capital goods and dip in manufacturing output, reflecting the sluggish state of the economy.
The IIP was negative in March, which declined to 3.2%.
Mukherjee said the government cannot take comfort from the fact the industrial output turned positive in April from negative a month ago.
The performance of the capital goods sector was disappointing, the Minister said, adding that only 12 out of 22 major industrial groups showed positive growth.
The capital goods output, according to the data, declined by 16.3% as against a growth of 6.6% in the same month last year.
Mining output also contracted by 3.1% in April, as against growth of 1.6% in the same month a year ago.
The slowdown in industrial production is likely to put pressure on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18.
SBI chairman Pratip Chaudhuri said he expected the RBI to cut Cash Reserve Ratio (CRR) by 1%, the portion of deposits that banks are required to keep with the central bank, to ease liquidity situation.