Industrial growth nosedived to 2.7 per cent in November 2010 against 11.3 per cent in the same period a year-ago, pulled down by dismal performance of manufacturing sector, particularly the consumer non-durables. In October 2010, the Index of Industrial Production (IIP) had expanded by 11.29 per cent.
The industrial growth during April-November of this fiscal stood at 9.5 per cent, against 7.4 per cent in the corresponding period last year, according to an official data released here on Wednesday. In November, manufacturing growth plummeted to 2.3 per cent against 12.3 per cent a year ago.
The manufacturing consumer non-durables production declined by (-) 6 per cent in the month under review as against a growth of 2.3 per cent in the same period a year ago. However, capital goods sector posted a growth of 12.6 per cent against 11 per cent in the same period last year.
Besides manufacturing, mining growth also fell to 6.0 per cent against 10.7 per cent in the month under review. Whereas, electricity generation expanded by 4.6 per cent against 1.8 per cent.
Finance minister Pranab Mukherjee on Wednesday said deceleration in industrial growth to 2.7 per cent in November and high inflation could have an adverse impact on the economy and promised to take corrective steps to push up factory output.
“If IIP goes down and inflation goes up, it will have an adverse impact, but I am not coming to any premature conclusion,” Mukherjee told reporters.
“We shall have to look into and take corrective measures so that IIP numbers revive in the remaining four months,” he said.
Even though part of the deceleration in growth may be because of high base effect of 11.3 per cent in November last year, the Finance minister refused to take it as a consolation.
“Last time, if you have noticed that in november last year it(IIP) was very high, so base effect is also there, but that is no consolation,” he said.
With IIP slowing down considerably, the Reserve Bank of India may be in a dilemma on whether or not to raise its policy rates to fight high inflation at the upcoming quarter policy review on January 25.