States' industrial performance saw major swings in 2012-13: Survey

Annual Survey of Industries data reveal disappointment for Karnataka, Punjab and Rajasthan

Industrial performance of states witnessed major swings in 2012-13 when the economy showed signs of a slowdown.

Recently released data by the Annual Survey of Industries (ASI) came as a disappointment for Karnataka, Punjab and Rajasthan, which grew at a phenomenal rate in 2011-12 but faced a drastic slowdown in 2012-13. Bihar also saw a drastic shift in its industrial fortunes over the period. Gujarat, on the other hand, witnessed a major turnaround from the lacklustre growth of the previous few years.

Industry in Karnataka, which showed the highest growth rate of 130 per cent in 2011-12, posted a decline in output by 43 per cent in 2012-13. Karnataka's share of total industrial production also dipped almost by half from 11.5 per cent in 2011-12 to 6.3 per cent in 2012-13.

Punjab and Rajasthan, where factory output slumped by 35.8 per cent and 21.6 per cent, respectively, in 2012-13, were also among the top five states in terms of industrial growth in 2011-12.

Economists were surprised at the trend and said an analysis of the data was required to explain the fluctuations.

"A segment-wise analysis of industries is required to gauge this trend. However, 2012-13 marked the beginning of a slowdown in the country," said Madan Sabnavis, chief economist at CARE Ratings.

According to the data, industrial growth in India, measured in terms of the gross value addition, stood at a subdued pace of 3.9 per cent compared to 18.4 per cent in the previous year. The economy grew at a decade's low of 4.5 per cent in 2012-13, which could be revised now in the light of ASI numbers.

Despite a slowdown, it was Gujarat under its then chief minister Narendra Modi which managed to put up stellar industrial growth. Gujarat's industrial production, computed in terms of gross value addition, rose by 36 per cent, much above the national average 3.9 per cent, and was the third fastest among all states.

After Maharashtra, Gujarat contributed the highest to industrial output (15 per cent). Maharashtra's share in the country's gross value addition was 19 per cent but industry in the state grew by 11.9 per cent.

In 2011-12, Gujarat's share in total industrial production stood at 11.3 per cent, after Maharashtra (18.3 per cent) and Karnataka (11.5 per cent).

This is a major turnaround for Gujarat, which had been witnessing a slump in industrial production in the last few years. In 2011-12, industrial output went up a marginal 0.9 per cent despite a low base effect on 1.2 per cent growth in the previous year. The base effect refers to the impact of the year-ago period, low numbers of the previous year magnify data for the year in question.

Sabnavis said some industries based in Gujarat must have performed well, leading to robust growth.

Kerala surpassed all states in industrial growth (92 per cent). However, its contribution to total factory output of the country was merely 2 per cent. Kerala was followed by Tripura (59.2 per cent), Gujarat (36.1 per cent), Haryana (26.2 per cent) and Delhi (23.9 per cent).

Bihar's industry witnessed the steepest decline at 52 per cent in 2012-13 from a healthy 28 per cent growth in the previous year (on a par with the national average) and a staggering 80 per cent in 2010-11.

Four states apart from Karnataka, Punjab, Rajasthan and Bihar witnessed a contraction in industrial output. These were Assam (-4.4 per cent), Goa (-10.9 per cent), Meghalaya (-13.4 per cent) and Manipur (-19.6 per cent).