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Net industrial growth fell to its lowest in a decade by 2.8 per cent in 2012-13, data from the Annual Survey of Industries (ASI), released on Monday, showed. Industrial growth here is measured in value terms on the basis of net value addition.
As the ASI estimates are used to revise gross domestic figures (GDP) figures, economic growth is likely to be revised further for 2012-13. It should be noted that GDP growth, too, was a 10-year low at 4.5 per cent. The exact impact of ASI survey on GDP growth is not clear, because the base of GDP data would be revised to 2011-12, when revised data for 2012-13 would come from the current practice of 2004-05.
Although ASI is based on the current prices, the revision in base year would make the entire exercise a bit complicated.
ASI is more comprehensive than the index of industrial production (IIP), as it encompasses small and medium industries as well, covering all units that employ at least 10 workers and use power or 20 workers but do not use power.
Meanwhile, investment by industries remained subdued in 2012-13 owing to high interest rates and lacklustre demand, the data showed.
Gross capital formation rose 9.3 per cent from Rs 4 lakh crore in 2011-12 to Rs 4.4 lakh crore in 2012-13 without adjusting for inflation. During 2011-12, capital formation had contracted by 8.7 per cent.
However, growth in 2012-13 remained way lower than what was recorded during 2009-10 (38.3 per cent) and 2010-11 (23.2 per cent).
The survey, which comes with a lag of two years, showed profits of firms surveyed declined by 4.7 per cent to Rs 4.3 lakh crore from Rs 4.5 lakh crore in 2011-12. However, what is troubling is the number of employees actually declined 3.5 per cent in 2012-13 to 12.8 million from 13.3 million in 2011-12.
While employment declined, wages grew at a muted pace. Wages to workers grew at the rate of 11.1 per cent in 2012-13 compared to 16.6 per cent in the previous year.
