Expect better IIP numbers in second half of financial year: C Rangarajan

New Delhi: Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan today expressed the hope that India’s industrial output growth will pick up in the second half of the current fiscal year.

“I see improvement (in IIP numbers) coming along as we go further during the year. I am hoping a better performace in the second half of the year,” Rangarajan said here. After recording modest growth in July, industrial output again slowed down sharply to 0.6 per cent in August mainly on account of a contraction in manufacturing and mining.

[caption id=“attachment_1167369” align=“alignleft” width=“380”]  C Rangarajan. Reuters. [/caption]

Factory output, which recorded a growth of 2.8 per cent in July, remained almost flat year-on-year because of a slump in production of consumer goods and durables. The output, measured on the Index of Industrial Production (IIP), was 2 per cent in August last year.

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As per the data released by the government today, IIP for April-August worked out to be 0.1 per cent compared with 0.2 per cent in the same period of 2012-13 financial year. The IIP figure for July has been revised upward at 2.8 per cent from 2.6 per cent, it said. It had contracted by 1.8 per cent in June.

The manufacturing sector, which constitutes over 75 per cent of the index, contracted by 0.1 per cent in August as against an expansion of 2.4 per cent in the year-ago period. During April-August, the sector saw a decline of 0.1 per cent compared with a flat growth in the same period last year.

The mining sector, with a weight of about 14 per cent in the IIP, showed a contraction of 0.2 per cent in August as against a decline of 0.3 per cent in the same month last fiscal. As per the data, output of capital goods, a barometer of demand, showed a decline of 2 per cent as against a contraction of 4.4 per cent in August 2012.

However, on cumulative basis, the segment showed an expansion of 0.8 per cent in April-August as against a sharp contraction of 14.4 per cent.

PTI