JOIN USFactory output hits two year low
But it were the slowdown in manufacturing, which contributes roughly 80 per cent to overall index of industrial production, and declining mining sectors that pulled down the IIP to below 2 per cent, data showed.
Manufacturing sector grew at a measly 2.1 per cent in September, compared with 6.9 per cent in corresponding period last year, prompting National Council for Applied Economic Research to say utmost care should be given to enable the laggard manufacturing sector to rise up to the demand of the time — both for creating gainful employment opportunities and sharpen export competitiveness.
Mining output dropped by -5.6 per cent. Mining grew 4.3 per cent in the same month last year. Capital goods production also witnessed a decline of (-)6.8 per cent in September in comparison to a growth of 7.2 per cent in the corresponding period last year, while consumer non-durables declined by (-) 1.3 per cent.
Growth was, however, seen in consumer durables output, which was up 8.7 per cent in September on the back of high festive demand.
Disappointing dip Prime Minister Economic Advisory Council Chairman C Rangarajan described the dip in factory output in September as “disappointing” and said industry may grow by just 6 per cent in the current fiscal, as against the earlier projection of 7 per cent.
“IIP for September is bad, but I do see a pick-up by the end of March. We had originally expected overall IIP at 7 per cent for the fiscal, but now it could be 6 per cent,” Rangarajan, told PTI.
“The IIP numbers are disappointing. It is well below our expectation,” he said, adding, “to some extent, decline is contributed by negative growth in the mining sector.”
“The government,” he said, “should ensure that the fall in coal production is corrected and also investment in infrastructure, especially, roads, rail and power.”