In sharp contrast to ongoing growth momentum in the economy, the industrial production growth rate slumped to 7.1 per cent in July this year compared to 12.4 per cent in the same period last year primarily due to the poor performance of key manufacturing sector.

On cumulative basis, the growth rate of industrial production during April-July of the current fiscal slowed down to 9.6 per cent as against 10.6 per cent in the corresponding period of the previous fiscal.

Explore reasons
The slump in the industrial production has provoked apex chambers of trade and industry to urge the government to seriously explore reasons that have been hurting the industrial production.

As per the quick estimates of Index of Industrial Production (IIP) released by the government, the crucial manufacturing output grew by only 7.2 per cent as against 14.3 per cent in July 2006, while electricity, and mining and quarrying sector registered a growth of 7.5 and 4.9 per cent respectively. In the first four months of the current fiscal these sectors - manufacturing, electricity and mining  witnessed a growth of 10.3 per cent, 8.1 per cent and 3.1 per cent respectively.

Arrest decline
Reacting to slowdown in industrial production, Assocham  suggested that the government and industry should objectively analyse reasons that are leading to fall in industrial production.

The industry chamber urged the government to take necessary steps to arrest the fall in industrial production growth rate in time to achieve 9 per cent GDP growth rate in the current fiscal.

Expressing concern over fall in industrial growth, FICCI said higher interest rate, appreciating rupee and a tighter monetary policy were impinging the growth impulses.