JOIN USGrowth rate surges again
This “spectacular” surge in the Index of Industrial Production in August, considered to be the fastest in the last 22 months, was spurred by an impressive double-digit growth in key segments like mining, manufacturing and electricity. An upbeat Planning Commission Deputy Chairman Montek Singh Ahluwalia said the recovery signs was a “good Diwali gift.”
Industrial production, which started witnessing declining growth rates ever since the ripple effects of the global slowdown was adversely felt in September last year, improved its growth rate in July this year to 7.2 per cent from 6.8 per cent estimated earlier.
Cumulatively, industrial production during the first five months of the current fiscal — April to August — posted a higher growth rate of 5.8 per cent compared to 4.3 per cent in the corresponding period of the previous fiscal.
The economy is recovering faster than expected with the government and industry viewing the ongoing improvement in the IIP growth rate as a “sign of recovery in the economy.”
Commenting on the latest data on industry performance, Finance Minister Pranab Mukherjee said: “It is a good sign. It is a recovery process from the earlier slowdown caused by the global financial crisis. Possibly in the coming months there could be some higher growth projection.”
Mukherjee hoped that “when the final figure of the second quarter will be available, there will be some higher growth. If the tempo of higher growth continues in the third and fourth quarters, we will make up the overall (industrial) growth rate,” he said.
Echoing Mukherjee’s words, CII Director-General Chandrajit Banerjee said: “The double digit growth of industry during August 2009 reinforces industrial revival and economic recovery. The 10 per cent plus growth in manufacturing, basic goods, mining and electricity has been buoyed by the government’s stimulus packages.” Banerjee said the government should continue with the current fiscal and monetary measures which will help the industrial and agricultural sectors.
Analysis of the data shows that the government’s stimulus measures early this year impacted positively to spur demand in the economy. For instance, the key manufacturing sector grew by an impressive 10.2 per cent while electricity generation expanded by 10.6 per cent in August.
The consumer durables sector, which showed negative growth for the past several months, posted a robust growth rate of 22.3 per cent in August against a low 3.9 per cent the same month last year.