IIP growth slows down to 4.4%
Industrial output growth almost halved to 4.4% in September—the lowest in 16 months—against 8.2% a year ago—as most sectors clocked sluggish growth.business Updated: Nov 13, 2010 02:00 IST
Industrial output growth almost halved to 4.4% in September—the lowest in 16 months—against 8.2% a year ago—as most sectors clocked sluggish growth.
Capital goods output contracted by 4.2% as companies deferred planned expansions after the Reserve Bank of India (RBI) raised interest rates several times to cool prices.
Finance minister Pranab Mukherjee expressed concern about the sharp fall in industrial production.
“We will have to analyse why that is happening. And after that considered comments can be made. But it's a matter of concern,” Mukherjee said.
Manufacturing, which comprises about 80% of the index of industrial production (IIP), grew at slower rate of 4.5% in September against 8.3% a year ago.
Electricity output expanded by 1.7% against 7.5% in the same month last year, latest data released by the government on Friday showed.
Mining output rose by 5.2% against 7.4%.Industry experts blamed the monetary tightening by RBI for the fall in industrial output growth resulting in deferring of expansion plans.
“The negative growth of capital goods sector for the second consecutive month which is also an indicator of how the manufacturing sector performs in the future, is a matter of grave concern,” said Amit Mitra, secretary general of Federation of Indian Chambers of Commerce and Industry (FICCI).
Assocham president Swati Piramal said the small and medium enterprises have been facing confidence deficit owing to difficulties faced in accessing finance.