New Delhi, April 12 (IANS) India’s industrial output grew by lower than expected 4.1 percent in February, led by 8 percent expansion in electricity production, official data showed Thursday.
However, manufacturing and mining output remained sluggish, reinforcing expectations for rate cut by the Reserve Bank of India for the first time in three years.
Mining output grew at a sluggish 2.1 percent in February and manufacturing production increased by 4 percent, according to monthly Index of Industrial Production (IIP) data released by the Central Statistics Office.
Meanwhile, the government has revised down the January factory output growth to 1.1 percent from 6.8 percent announced earlier.
The CSO has attributed the downward revision in IIP to an error in sugar production data. During the compilation of IIP for January 2012, the sugar production was wrongly taken as 134.08 lakh tonnes in place of actual figure of 58.09 lakh tonnes.
“This wrong figure was taken because of incorrect reporting by the Directorate of Sugar in the Ministry of Consumer Affairs, Food and Public Distribution,” the CSO said.
Reacting to the monthly data, Finance Minister Pranab Mukherjee said the sharp downward revision of data in January and sluggish growth in February will have a bearing on the monetary policy review by the central bank.
The RBI is scheduled to announce the annual monetary policy for 2012-13 on April 17.
Mukherjee said the government and the RBI would take collective efforts to revive investments and growth.
The cumulative growth in the factory output, measured in terms of IIP, for the period April-February 2011-12 stands at 3.5 percent.
Electricity output increased by 8.7 percent in the first 11 months of the year and manufacturing production grew by 3.7 percent. However, mining output declined by 2.1 percent in the April-February 2011-12 period.
“Overall industrial growth remains weak and is not likely to exceed 4 percent in the full year 2011-12,” said Chandrajit Banerjee, director general, Confederation of Indian Industry (CII).
“In order to realise the budget projection of 7.6 percent GDP growth in 2012-13, it is necessary to use all policy levers to encourage growth and investment. It is time that the RBI focuses on getting growth back by sharply reducing interest rates,” Banerjee said.
As per “use-based” classification, production of basic goods grew by 7.5 percent, capital goods increased by 10.6 percent and consumer non-durables registered a growth of 5.1 percent in February.
However, intermediate goods and consumer durables showed negative growth of 0.6 percent and 6.7 percent, respectively, in February.
