New Delhi, Dec. 12: The index of industrial production (IIP) skidded to clock a growth rate of just 6.2 per cent on a year-on-year basis in October, casting doubts on Prime Minister Manmohan Singh’s assertions yesterday on the economy notching up a growth rate of more than 8 per cent for the fiscal.
The manufacturing sector, having a weight of 75 per cent in the index, reported a disappointing growth of 6 per cent compared with 10.9 per cent a year ago. The figures were released by the Central Statistical Organisation (CSO) today.
The IIP, which aggregates the growth indices of manufacturing, power generation and mining, rose 9.8 per cent in October last year.
While the CSO figures seem to show the economy hitting a rough patch, leading bankers feel the slowdown is temporary and growth will pick up in the last quarter.
Vijaya Bank chairman Prakash P. Mallya said the slip was caused by the slowdown in manufacturing. “… but with the economy pushing towards an 8 per cent growth, this slowdown is only temporary and nothing to be worried about. It will pick up by the end of this fiscal,” Mallya said.
The industrial growth rate had accelerated to 12 per cent in September 2006 from 9.9 per cent in August and 12.7 per cent in July, the highest for this fiscal.
The growth rate in manufacturing in October was down to 6 per cent from 10.9 per cent a year ago as there was almost no growth in consumer goods.
Electricity generation grew 9.7 per cent during the month under review compared with 7.7 per cent a year ago; mining by 4 per cent against a negative growth of 0.1 per cent a year ago.
Electricity and mining powered the core sector index to a 9 per cent growth in October compared with 7.4 per cent a year ago.
For the seven months of April to October the growth was 7.5 per cent compared with 5.2 per cent in the corresponding period of the previous year. Analysts said the core sector show was a case of high growth on a low production base.