ASI lowers industrial growth for 2012-13 to 1.8%

This would have some repercussions for GDP numbers for that year as well as two subsequent years

India's industrial growth was slightly less than what was  previously estimated for 2012-13, which would have some repercussions for gross domestic product (GDP) numbers for that year as well as two subsequent years.

The Annual Survey of Industries (ASI) on Tuesday revised the net industrial growth rate to 1.8 per cent   from 2.8 per cent estimated earlier for 2012-13.

Both the revised figures and the earlier estimates were a decade's low. As the ASI estimates are incorporated in GDP figures, economic growth for 2012-13 is also likely to be revised. As a consequence, figures for 2013-14 and 2014-15 might also be altered. However, it should be noted that industrial figures given in ASI are in current prices, while the GDP growth is given  in constant  prices (adjusted for inflation).

The exact magnitude of the revision is uncertain, as the Central Statistics Office (CSO) has in its latest series also incorporated data from the MCA 21 database of the corporate affairs ministry, in addition to the ASI estimates. ASI is more comprehensive than the index of industrial production (IIP) in that it also covers small and medium industries — all units employing at least 10 workers and using power or 20 workers even if not using power.

Industry grew 2.4 per cent in 2012-13, 4.5 per cent in 2013-14 and is officially projected to grow 5.9 per cent in 2014-15 in the GDP data.  India's economy rose 5.1 per cent in 2012-13, 6.9 per cent in 2013-14 and is projected to grow 7.4 per cent in 2014-15 by advance estimates.

The revised estimates of ASI showed gross capital formation grew at a faster pace of 9.8 per cent in 2012-13, against provisional estimates of 9.3 per cent growth without adjusting for inflation.  During 2011-12, capital formation had contracted 8.7 per cent. However, growth in 2012-13 remained way lower than what was recorded during 2009-10 (38.3 per cent) and 2010-11 (23.2 per cent).

The survey, which comes with a lag of two years, showed profits of firms surveyed contracted 1.6 per cent, declining from Rs 4.5 lakh crore in 2011-12 to Rs 4.4 lakh crore in 2012-13. But the pace of contraction, according to the revised estimates, was lower than that observed in the provisional estimates.