Industrial output growth, at 8.6 per cent in February, was better than market expectations, easing some concerns about the extent of the slowdown in the economy, but still is a far cry from the 11 per cent clocked in the same month a year ago.
The February number for the index of industrial production is, of course, better than January’s 5.3 per cent growth rate, later revised to 5.8 per cent.
The rate of growth for April-February 2007-08 is 8.7 per cent over the corresponding period of the previous year but substantially below the 11.2 per cent notched up then.
The output of capital goods grew by 10.4 per cent and consumer non-durables by 11 per cent in February. Basic goods were up 7.3 per cent and intermediate goods 8.2 per cent. However, consumer durables grew 3.3 per cent, with the overall growth in consumer goods being 9.2 per cent.
“The data reflected a moderation in industrial output rather than slowdown,” said Shubhada Rao, chief economist, Yes Bank. “Given the inflation rate of 7.4 per cent, it is important to see the monetary measures of the central bank,” she added.
Indian industry was in a piquant situation, where all input costs were rising but output prices had been restrained, said Amitabha Chakraborty, president, Religare Securities. “Due to the strengthening of commodities prices globally, the manufacturing sector is witnessing cost-push inflation,” he added.
Output in as many as 15 of the 17 industry groups has grown during February 2008. The group, jute and other vegetable fibre textiles (except cotton), grew a mind-boggling 864.1 per cent, followed by 18.8 per cent in leather and fur products and 18.2 per cent in metal products and parts.