By IANS,
New Delhi : India’s industrial output grew at a sluggish rate of 4.1 percent in August due to decline in mining output and poor performance in manufacturing sector, official data showed Wednesday.
Growth in industrial production has slumped during the last two reporting months which will make it difficult to achieve the targeted 8 percent economic growth in the current fiscal. In July, the industrial output growth slumped to 3.8 percent, lowest in almost two years.
Growth in factory output, measured in terms of the Index of Industrial Production (IIP), stands at 5.6 percent during April-August period, according to data released by the ministry of statistics and programme implementation.
Mining output slumped by 3.4 percent in August, registering just 0.2 percent cumulative growth in the first five months of 2011-12.
Manufacturing production grew at a sluggish rate of 4.5 percent in August, while electricity output registered a good growth of 9.5 percent during the month under review.
Manufacturing sector, which constitutes over three-fourths of the IIP index, registered cumulative growth of 6 percent in April-August period.
Out of 22 industry groups in the manufacturing sector, half registered positive growth in the month under review, year-on-year, while 10 posted negative growth and one — paper and paper products – showed no change.
Among the industry group “Radio, TV and communication equipment and apparatus” showed the highest growth of 12.5 percent, followed by 12.1 percent in “other transport equipment” and 11.6 percent in “fabricated metal products, except machinery and equipment”.
Office, accounting and computing machinery registered the highest negative growth of 26.8 percent, followed by 20.5 percent slump in tobacco sector.
The slump in industrial production growth will give further strength to the arguments of India Inc that continuous rate hikes by the Reserve Bank of India were affecting growth.
The RBI has hiked key policy rates 12th time since January 2010 to tame stubbornly high inflation. This has made the cost of capital expensive, dampening industrial output growth.