Worries mount as industrial growth slumps to 3.6% in Feb
India’s factory output expanded by a mere 3.6% in February, lower than the revised 3.9% expansion in the previous month, adding another worry for the government’s economic policy makers.business Updated: Apr 11, 2011 22:33 IST
India’s factory output expanded by a mere 3.6% in February, lower than the revised 3.9% expansion in the previous month, adding another worry for the government’s economic policy makers.
India’s factory output had expanded by 15.1% in the corresponding period last year.
Capital goods output contracted 18.4% in February — a sign that costlier credit and rising input cost pressures may have forced companies to defer planned investments.
Industry captains said any further rise in interest rates would deepen deceleration in manufacturing.
Montek Singh Ahluwalia, deputy chairman, Planning Commission, said that the farm sector, expected to grow more than anticipated, will make up for the shortfall in the industrial output.
“I think agriculture growth will be higher than the earlier forecast (of 5.4%), I don’t think that (industrial growth below 8% level) will make a difference (to the projected GDP growth rate),” he said.
“The two areas of great concern to us are moderation in the growth of the mining sector over the last few months, and also the negative growth in capital goods for three months” said Rajiv Kumar, director general, Federation of Indian Chambers of Commerce and Industry.