Industrial growth dips to 6.9% in November

A sharp decline in mining, sluggish electricity generation and a slower manufacturing sector pulled down industrial growth in November 2005 to 6.9 per cent from 7.7 per cent in November 2004.

Mining output in November 2005 shrank by 1.4 per cent from the same month a year ago, when it had grown 3.6 per cent. Electricity generation was up 2.7 per cent in November 2005, a rate far lower than the 3.4 per cent growth in November 2004.

Manufacturing output grew 8.1 per cent in November 2005, compared with 8.6 per cent in November 2004.

The cumulative growth in the index of industrial production (IIP) during April-November 2005 at 8.3 per cent was also marginally less than the 8.6 per cent rate in April-November 2004.

"The poor performance of mining and electricity is worrying. Lower coal production has a direct impact on electricity output," said DK Joshi, senior economist at Crisil.

Joshi, however, said despite a slowdown, the manufacturing sector had performed well in November. The manufacturing sector had grown rapidly last year.

Saumitra Choudhary, chief economic adviser at ICRA, said there was no reason for alarm. Mining growth slumped due to fall in crude oil production as a result of the blaze at the Oil & Natural Gas Corporation oil rig, he said.

In the manufacturing sector, the growth rate for basic goods fell to 4.5 per cent from 6.6 per cent in November 2004.

The capital goods, however, grew at a rate of 11.8 per cent compared with 7.8 per cent last year.

In November 2005 the consumer durables and consumer non-durables recorded a growth of 14.9 per cent and 10.7 per cent, respectively. The consumer goods sector witnesses a growth of 11.8 per cent.

During April-November 2005 manufacturing growth stood at 9.4 per cent compared with 9.1 per cent last year.