Industrial growth index up 11.7% in June

Led by a healthy growth in the manufacturing and electricity sectors, industrial growth remained in the double-digit range for the second month in a row.

In June 2005, the index of industrial production (IIP) rose 11.7 per cent, the highest monthly growth rate since May 1996. IIP growth was 7.3 per cent in June 2004 and in May 2005, while industrial growth was 10.9 per cent.

"June 2005 will be the 36th month with high industrial growth, but it will be safest to wait for a couple of months to see if the trend continues. If it does, the current expansionary phase will be the longest in the post-reform period," said Saumitra Chaudhuri, economic advisor, ICRA.

The previous longest cycle in the post reform period was July 1993 to August 1996.

In the first quarter of the fiscal, industrial growth was 10.3 per cent, against 7.7 per cent in the corresponding period in 2004-05, according to the official figures released by the Central Statistical Organisation today.

Manufacturing growth was 11.2 per cent in April-June 2005-06, against 8.1 per cent in the first quarter of the previous fiscal. Electricity grew 7.6 per cent, against 5.9 per cent in April-June 2004-05, while the mining sector reported 4.5 per cent growth, down from 5.7 per cent in the corresponding period last year.

Manufacturing sector grew by 12.5 per cent in June 2005, up from 8.1 per cent in June 2004. The previous high was 13.4 per cent growth in July 1996. Textile products, including wearing apparels reported 37.6 per cent growth, followed by 20.2 per cent rise in basic chemicals and chemical products.

Electricity production was up 9.4 per cent, compared with 4.5 per cent in June 2004, while the mining sector growth was up at 5.8 per cent, against 2.7 per cent in June last year.

The index for March 2005 was revised upwards, and IIP growth in March 2005 is now revised up to 9.8 per cent, against 8.8 per cent reported earlier. The growth in IIP in May 2005 has also been revised marginally from 10.9 per cent to 10.8 per cent.

As per the use based classification, basic goods growth was 8.5 per cent, against 2.9 per cent in June 2004. In the first quarter of the fiscal, this segment grew 7.6 per cent against 4.6 per cent in the corresponding period in 2004-05.

Capital goods grew 10.8 per cent against 16.9 per cent in June 2004. In the first quarter of this fiscal, the segment grew 14.6 per cent, up from 13.4 per cent in the first quarter in 2004-05.

Consumer goods grew 23.7 per cent in June 2005, up from 9.1 per cent in June last year. Consumer durable items reported 13.3 per cent growth against 16.8 per cent in June 2004. Consumer non-durable items grew 27.5 per cent , up from 6.5 per cent in June 2004.