IIP growth falls to 6 year low of 3% in March 2008

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New Delhi, May 12 (UNI) Industrial production slipped to a six month low recording a low growth rate of three per cent, pulled down by manufacturing which registered a growth rate of 2.9 per cent as well as low growth of mining and electricity sectors.

Manufacturing, which has a weight of 80 per cent in the IIP, fell from 16.0 per cent in the same month a year ago. The sector which is regarded as a kingpin of economic growth has been on the downturn for some months now. Analyst say that a step hike of interest rates or in the recent past as well as the appreciating rupee have acted heavily in bringing down the growth of the manufacturing sector.

Data released by the Central Statistical Organisation releasedn today showed that electricity production grew by 3.7 per cent, less than half of the figure in March 2007. The figure for this month last year was 7.9 per cent. Mining production grew by a low 3.8 per cent as against eight per cent in the same month a year ago.

A section of the economists feared that the economy is slipping into a recession, even though Planning Commisssion Deputy Chairman Montek Singh Ahluwalia exuded confidence that the economy will be able to flock 8.5 per cent growth this fiscal.

The fear of these economists emanated from the fact that the government trying to combat inflation will make no attempt to bring down interest rates, which are adding to the cost of production apart from the appreciating rupee.

The April-March growth was 8.1 per cent as compared to 11.6 per cent in the same period in 2006-07.

Manufacturing growth during April-March 2007-08 was 8.6 per cent as compared to 12.5 per cent in the same period last year. Minning during April-March 2007-08 was 5 per cent as compared to 5.4 per cent in the same period last year.

Electricity recorded a growth rate of 6.4 per cent in 2007-08 as compared to 7.2 per cent in April-March 2006-07.

Consumer durables production in March 2008 dipped by 2.1 per cent as against a growth of 3.8 per cent in the same month previous year.

Capital goods grew by 8.6 per cent as against 18.1 per cent in the same said period. Capital goods are regarded as a brometer of industrial growth.

Basic goods production grew by 3.1 per cent as against 11.9 per cent, while intermediate goods production was up by 3.5 per cent, as against 15.3 per cent in March 2007.


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