Growth peaks, but core still weak

ECONOMIC SURVEY 2004-05/ MANUFACTURING

The country's industrial sector reported a growth of 8.4 per cent during the first three quarters of 2004-05, the highest in the last nine years.

According to the Economic Survey 2004-05, the 8.4 per cent growth in the Index of Industrial Production (IIP) was the highest since 1995-96. The survey said the improvement was particularly pronounced in manufacturing, capital goods and consumer durables.

The year began with a growth of 8.9 per cent in the IIP in April 2004. Despite the slowdown in May 2004, touching a low of 6.8 per cent, the growth trend bounced back in each of the subsequent months, peaking at 9.8 per cent in October.

In 2004, the manufacturing sector, after declining from 8.8 per cent in April 2004 and 7.5 per cent in May, started to climb steadily and touch double-digit growth in September and October.

Within the manufacturing sector, capital goods and consumer durables witnessed double-digit growth during the first nine months of this financial year. In September 2004, according to the survey, growth in the capital goods and consumer durables was at 16.8 per cent and 20.6 per cent respectively.

Between April and December 2004, four industry groups, textile products (14.8 per cent), chemicals (15.7 per cent), machinery, equipment and other transport equipment (21.9 per cent) and other manufacturing industries (19.4 per cent) recorded double-digit growths. Four other groups recorded five to 10 per cent growth and six groups grew between zero and 5 per cent.

Elaborating on the sector specific growth, the survey pointed out that automobile and related component industry continued to post robust growth.

During the first nine months of this financial year, total vehicle production grew to 6.2 million units from 5.2 million units produced during the same period last year. During the same period production of steel increased to 28.3 million tonnes, which was four per cent more over the same period last year.

During the first nine months of this financial year, cement production grew by 6.81 per cent to 96.3 million tonnes.

Despite the overall feel-good numbers cited in the survey, a passing mention is also made the of lower average growth in the six core industries of electricity, coal, finished steel, cement, crude oil and petroleum products, with average growth of 5.4 per cent between April and December 2004, against 5.8 per cent average growth posted during the previous corresponding period.

The survey explained that the lower average growth in these core industries that have forward linkages to the economy, was owing to sharp fall in growth of finished steel.

Chapter-wise documents of Economy Survey 2004-05

General Review

Public Finance 
   
Monetary and Banking Developments 

Securities Markets

Prices and Food Management 

External Sector

Industry

Agriculture

Infrastructure

Social Sectors