8.8% IIP growth in June "encouraging", says Pranab

Finance Minister Pranab Mukherjee
New Delhi, Aug 12: Terming the 8.8 per cent industrial growth recorded in June as "encouraging", Finance Minister Pranab Mukherjee today (Aug 12) said if the trend continues, it will boost economic growth.

"It is encouraging. If this trend continues, it will give a boost to growth," Mukherjee told reporters here.

He was commenting on the industrial growth figures for June, which showed a moderate recovery to 8.8 per cent on the back of the strong performance of the manufacturing sector and better output of capital goods.

Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 7.4 per cent in June last year, as per government data released here.

Output of the manufacturing sector, which constitutes over 75 per cent of the index, grew by 10 per cent in June, 2011, compared to 7.9 per cent in the same month last year.

Offtake of capital goods jumped by 37.7 per cent in June, 2011, as against a moderate increase of 3.7 per cent during the corresponding month last fiscal.

Similarly, electricity production also improved, witnessing a growth of 7.9 per cent during the month under review, as compared to a growth of 3.5 per cent in June, 2010.

Commenting on the latest numbers, Planning Commission Deputy Chairman Montek Singh Ahluwalia said: "I am glad that the latest figures show improvement. I think it is broadly along the lines that we have been talking about for the current year." 

Ahluwalia said economic growth this fiscal would be in the range of 8-8.3 per cent.

"I remain of the view that GDP growth in the current year (2011-12) could vary anywhere between 8 and 8.3 per cent, which is roughly consistent with the spot forecast of the Prime Minister's Economic Advisory Council," Ahluwalia said.

Meanwhile, the industrial growth number for May this year has been revised upward to 5.9 per cent from the provisional estimate of 5.6 per cent.

During the first quarter (April-June) this fiscal, IIP growth stood at 6.8 per cent, as against 9.6 per cent in the corresponding three-month period last year.


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