India's industrial production grew at the fastest rate during the last five months at 2.5 per cent in March but failed to cheer the industry as it remained at over two decades low at one per cent during 2012-13.
Led by better performance of sectors like manufacturing, power, capital goods and consumer non-durables, factory output measured in terms of the Index of Industrial Production (IIP), rose to 2.5 per cent raising hopes that economic growth might cross 6 per cent mark during the current fiscal.
For the fiscal 2012-13 as a whole, the IIP slipped to one per cent, the lowest since 1991-92 when the factory output grew by a meagre 0.6 per cent. It was 2.9 per cent in the previous fiscal.
"IIP data reveals that the Indian industry's performance in 2012-13 is its worst showing in the past 20 years...The current situation is reminiscent of the crisis year of 1991-92 when industrial output grew by a mere 0.6 per cent..." said rating agency Crisil.
However, taking comfort from the growing trend of IIP since November, Economic Affairs Secretary Arvind Mayaram said, "we are happy to see IIP numbers.
"This is exactly the trend we are hoping. If it (the trend) continues, inflation comes down and growth begins to pick up, I am quite confident that (the economic) growth in current fiscal would cross the 6 per cent mark."
IIP growth at 2.5 per cent in March is the highest since November 2012 when the factory output showed a contraction of one per cent. It declined by 2.8 per cent in March last year.
Commenting on the data, chairman of the Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan said: "This will be the second or third month in which the manufacturing growth will be positive. We were for a time in the negative territory."
"All this clearly indicates that we are in the upward direction. We need a much, much stronger industrial growth, but certainly the direction in which it is moving is encouraging," he added.
