IIP growth disappointing, revival expected in coming months: FM
Describing the 1.8% industrial output growth in December as "disappointing", finance minister Pranab Mukherjee today expressed hope that the figures would show some improvement in the coming months.business Updated: Feb 10, 2012 15:44 IST
Describing the 1.8% industrial output growth in December as "disappointing", finance minister Pranab Mukherjee on Friday expressed hope that the figures would show some improvement in the coming months.
"IIP is disappointing...I hope from the next couple of months it will start improving," Mukherjee told reporters in New Delhi.
Factory output growth, as measured by the Index of Industrial Production (IIP), fell sharply to 1.8% in December 2011, from 8.1% a year ago, mainly on account of contraction in mining, capital goods and poor growth in manufacturing sector.
Expressing similar opinion, Prime Minister's Economic Advisory Council chairman C Rangarajan said that the numbers are disappointing and added that investment sentiment would revive in the next three months.
"There are indications of revival in factory output in January-March quarter as mining sector would show improvement as coal output is expected to rise," Rangarajan said.
He said the GDP growth for the current fiscal is likely to be "a shade better" than 6.9% estimated by the Central Statistical Organisation (CSO).
He said the growth for the next fiscal (2012-13) is likely to be around 7.5%.
Output of the manufacturing sector, which constitutes over 75% of the index, rose at a lower rate of 1.8% in December, compared to a growth of 8.7% in the same month of 2010.
Besides, capital goods sector witnessed a contraction of 16.5%, against a growth of 20.2% in the same month in 2010. Mining output too contracted by 3.7% in December, against 5.9% growth in the year ago period.