Industrial growth has been pegged at a mere 6.7 per cent in 1996-97 as against the 11.6 per cent growth witnessed during the previous year, according to quick estimates for industrial production released by the Central Statistical Organisation (CSO) here yesterday.
The government had hoped that industrial growth would at least cross 7 per cent However, the progressive slowdown since November stepped up sharply by March a month torn by political instability to settle at 2.9 per cent growth for the month.
The CSO industrial growth figures have validated the estimates of Ficci which had pegged industrial growth for the year at 7 to 8 per cent against the CII estimate of 10-12 per cent. The slide began in the second half, beginning November, when average growth dipped to 4.19 per cent from 9.97 per cent growth in October.
The slowdown further decelerated to 4.01 per cent in December, slipping to 1.60 per cent in January before rising marginally to 3.18 per cent in February, only to finally settle at 2.91 per cent in March.
Although a month-on-month comparison is not the norm while analysing industrial growth-related data since seasonal factors have some influence on industrial activity and hence point-on-point comparisons between the current and the previous year is normally followed the sharp downtrend witnessed since November without relief has made this mode of comparison more relevant.
The government till recently been willing to concede only a deceleration in growth and not a slowdown on the grounds that the downtrend would reverse itself towards the last quarter. The Economic Survey had also carried on in this vein, projecting a 10 per cent growth during the year. However, this did not happen and during the last one month the government has started freely using the term slowdown while referring to the present years performance. The user-based classification for industrial production during March indicates that negative growth now pervades four sectors, including consumer durables (-1.9 per cent) and non-durables (-.4 per cent), consumer goods (-.8 per cent) and capital goods manufacture (-2.5 per cent).
Growth in the intermediate sector has witnessed a deceleration but still continues to be positive at 2.4 per cent on a 15.7 per cent growth seen during the same period in the previous year. The only sector where the index has outperformed the previous years growth is in the basic goods production.
