A robust performance by the manufacturing sector pushed the overall industrial growth to 11.3 per cent in 2006-07 compared with 8.2 per cent in the previous financial year.
In March 2007, industry, measured by the index of industrial production (IIP), grew by 12.9 per cent , up from 11 per cent in February 2007. Year on year, industrial growth in March 2007 was four percentage points above the 8.9 per cent clocked in the same month of the previous year, according to data released by the Central Statistical Organisation (CSO) on Friday.
The biggest component of this growth has been achieved by the manufacturing sector, which grew 14.1 per cent in March. Analysts attributed this to an expansion of capacities by large and small manufacturing units to match demand, both domestic and external, that continues to rise at a fast clip. This is significant, particularly in the context of the high growth of 12.3 per cent achieved during the previous month.
Significantly, a major turnaround in the power sector is visible; the electricity sector growing by 7.9 per cent in March compared with 3.3 per cent in February. The unimpressive growth of electricity during February had raised concerns that deceleration in the power sector might prove to be a damper on the manufacturing growth process.
For the whole of 2006-07 electricity generation grew by 7.2 per cent, compared with 5.2 per cent in the previous year. Growth in the mining sector in March dropped marginally to 6.2 per cent from 6.3 per cent in February. However, during the whole of 2006-07 it grew by 5.1 per cent as compared with a meager 1 per cent in 2005-06.
The infrastructure sector also grew by an impressive 8.6 per cent in 2006-07 as compared with 6.2 per cent the previous year. The rise has been fuelled primarily by higher crude oil output and production in refineries.
According to the data released on Friday by the Department of Industrial Policy and Promotion, in March 2007, growth of the core sector was 10 per cent against 7.1 per cent in the same month last year.
There has been a massive swing in the production of crude oil. Output, which had shrunk by 5.3 per cent in 2005-06, turned around to clock a growth rate of 5.6 per cent in 2006-07. The output of refineries grew 12.6 per cent in 2007 against 2.4 per cent in 2005-06.
Buoyed by a surge in demand, the steel sector also recorded an impressive performance, recording growth of 15 per cent in March 2007. On a cumulative basis, however, the production of steel grew by 10.9 per cent during 2006-07, a marginal drop from the 11.2 per cent in the previous year.