FM expects industry to grow by 12-13% this yr

Enthused by 13.8 per cent industrial growth in July, Finance Minister Pranab Mukherjee today pegged industrial expansion at 12-13 per cent this year.

He also said the manufacturing sector, which generates jobs, was performing well.

"I expect average industrial growth to be between 12-13 per cent this year. Manufacturing, which generates employment is doing well," Mukherjee told reporters.

When asked whether RBI will further tighten monetary policy to combat inflation, the Finance Minister said, "Government and RBI are watching. Let us see. We will take actions as the situation demands."

RBI is expected to raise its short-term borrowing and lending rates at its September 16 mid-quarter review.

Overall inflation for the month of July was 9.97 per cent, while figures for August are expected next week. Food inflation shot up to 11.47 per cent towards the end of August from 10.86 per cent in the previous week.

Industrial growth figures for July exceeded expectations by accelerating to 13.8 per cent in July from 7.2 per cent a year ago. Most experts had earlier pegged the growth to be lower, in single digit figure.

Manufacturing grew by 15 per cent in July against 7.4 per cent a year ago.

However, industrial growth stood at 11.4 per cent in the first four months of this fiscal.

The government expects the Industry sector, which constitutes little less than 20 per cent to India's economy, to grow by 8.5 per cent this fiscal.