JOIN US"It (the Index of Industrial Production) is not encouraging...," he told reporters at a meet organised by Nabard here. Mukherjee, however, said the monthly figures should not be seen as a trend-setter.
"I do not always take into account the monthly and weekly figures as the real trend-setter. At least quarterly figures will have to be taken into account. Otherwise, there are problems, of course," he said.
The Finance Minister's comment came after the release of data which showed factory output, as measured by the IIP, dropping to 5.6 per cent in May from 8.5 per cent in the same month last year. The slowdown in industrial growth is mainly due to the poor performance of the manufacturing and mining sectors.
The IIP numbers for April have also been revised downward to 5.7 per cent from the earlier estimate of 6.3 per cent, as per the new series with a base year of 2004-05. Mukherjee said the government was in talks with various stakeholders so that the contribution of the manufacturing sector could be increased in the country's overall GDP.
"We are having discussion with various people, chambers of commerce and others and we are working out how to improve the manufacturing sector," he said. The government aims to increase the contribution of manufacturing to the GDP to 25 per cent in coming years from about 16 per cent at present.
"The contribution of the manufacturing sector will have to be 25 per cent of the GDP, which is a very substantial jump, and for that, various measures have to be taken," Mukherjee added.
The manufacturing sector, which accounts for over 75 per cent of the total weight of the index, grew by just 5.6 per cent in May, 2011, as against 8.9 per cent in the same month of 2010.
Similarly, the mining sector grew by a meagre 1.4 per cent in May, 2011, as against 7.9 per cent in the same month last year.