Industry grows 7.4% in February

Industrial growth touches high of 6.7 per cent in Apr-Feb '03-'04

India's industrial growth rate touched 7.4 per cent in February 2004, which is 40 basis points higher than the 7 per cent growth recorded in February 2003.

According to the quick estimates of the monthly Index of Industrial Production (IIP) released by the Central Statistical Organisation yesterday, the cumulative growth rate of the industrial sector now stands at 6.7 per cent for the period April-February 2003-04. This is the highest growth recorded since 1997-98.

Industrial growth stood at 5.8 per cent in April-February 2002-03.

The growth has mainly been propelled by a cumulative growth of 7.2 per cent in the manufacturing sector in the same period. In February 2004, however, the manufacturing sector grew at 6.7 per cent, compared with 7.1 percent in the same month last year.

The IIP figures for the mining and electricity sectors stood at 9.6 and 12.1 per cent, respectively, this February.

The robustness of the manufacturing sector is based on the strong performance of the capital goods sector, which grew 24.7 percent in February 2004, compared with only 5.1 percent in February 2003.

The performance of the capital goods sector is critical as it is an advance indicator of how industry will perform in the future. It reflects the level of industrial activity. The cumulative growth of the capital goods sector during the first 11 months of the last fiscal was 11.9 per cent, compared with 10.5 per cent in April-February 2002-03.

In the same eleven-month period, the intermediate goods sector clocked a growth of 6.3 per cent, compared with 3.5 per cent in the same period in the previous year. Also, basic goods rose 5.3 per cent as against 4.8 per cent in April-February 2002-03.

According to the monthly monitor released by the Institute of Economic Growth, the growth in the industrial sector is backed by a strong recovery in domestic demand fuelled by a bumper agricultural production and also a rise in external demand. It has forecast a growth rate of 6.8 per cent for the whole fiscal.

February also witnessed the largest growth rate of 34.7 per cent in machinery and equipment, followed by 17.6 per cent in wool, silk and man-made fibre textiles and 16.8 per cent in basic chemicals and chemical products (except products of petroleum and coal).

On the other hand, textile products (including wearing apparel) have shown a negative growth of 15 per cent in the same month. Also, food products declined 14.4 per cent and the leather and leather and fur products sector 13.4 per cent this February. Consumer non-durables, such as shoes and shampoo, fell 2.6 percent this February compared with a 13.4 per cent rise a year ago.