Economy shows stress marks

Industrial, export growth slower in November, December

Industrial growth and exports are showing signs of deceleration. The growth in industrial production slowed to 7.9 per cent in November 2004 against 8.2 per cent in November 2003.

The growth in exports also slipped in December 2004, rising 14.6 per cent to $6.8 billion against $5.9 billion in December 2003. Despite the slowdown, exports grew 23.4 per cent to $53.5 billion in April-December this fiscal year.

According to the provisional trade data released by the commerce department today, imports during April-December were up 34 per cent to $73.6 billion.

The increase was largely on account of a rise in crude oil prices and a spurt in capital goods imports. Imports during December 2004 were valued at $9.4 billion, compared with $7.3 billion in November 2003, representing an increase of 28.74 per cent.

With imports growing faster than exports, India's trade deficit widened by over $8 billion to $20.1 billion, against $11.8 billion in the corresponding period last year.

Lower growth in mining and electricity led to a marginal deceleration in industrial production during November. The manufacturing sector, however, grew 8.8 per cent in November, against 8.9 per cent in the corresponding period last year.

Textile products and other manufacturing industries reported over 20 per cent growth during the month, followed by machinery and chemicals.

However, the performance during the first eight months of the current fiscal year was much better, with the industrial sector growing 8.4 per cent against 6.4 per cent in the corresponding period in 2003-04. Cumulative growth in the manufacturing sector in this period was 8.9 per cent against 7.1 per cent in April-November 2003-04.

As per the use-based classification, the basic goods and capital goods segments grew at 6.7 and 10.3 per cent respectively, while the intermediate goods sector reported 4.7 per cent growth, sharply down from 11.3 per cent in November 2003.