IIP back to double-digit growth

Reversing a four-month trend, industrial growth rose sharply this August, pushing the Index of Industrial Production (IIP) back to double digits for the first time since June.

The rebound came on the back of robust manufacturing production, especially in capital goods. Even mining, which had lagged significantly, recorded a massive and unexpected growth during the month. 
 

ON THE DOUBLE Sectoral growth (in per cent)
Sector	April	May	June	July	August
Manufacturing	12.36	11.30	9.86	7.85	10.40
Electricity	8.68	9.35	6.75	7.50	9.20
Mining	2.60	3.76	1.47	3.68	17.10
Overall	11.32	10.59	9.04	7.51	10.70
Source: Central Statistical Organisation (revised figures for April to July)

Mining accounts for 10.47 per cent of the index of which coal and crude oil account for the bulk.

The IIP rose 10.7 per cent this August against 10.28 per cent a year ago. Overall, for the first five months of the current fiscal, industrial growth stood at 9.8 per cent.

Manufacturing, which accounts for nearly 80 per cent of the index, grew 10.4 per cent in August, against 11.94 per cent in 2006. Although this is much better than the growth in the previous two months, it is lower than last year.

The good showing by manufacturing was dented only by consumer goods that continue to reel under the impact of high interest rates.

The sector grew 0.5 per cent in August against 5.69 per cent in July and much lower than a year ago. This is the lowest growth rate the segment has seen so far.

Experts said the decline in consumer goods was a cause for concern. "This indicates a slowdown in consumption," said Siddhartha Roy, economic advisor, Tata group.