Factory output growth slows to 2% in April - Times of India

The author has posted comments on this articleTNN | Jun 13, 2013, 06.10AM IST NEW DELHI: The country's industrial output growth remained sluggish in April due to weakness in manufacturing, mining and electricity sectors triggering calls for interest rate cuts and faster implementation of delayed projects to revive growth. Data released by the Central Statistics Office (CSO) on Wednesday showed the index of industrial production (IIP) rose 2% in April, slower than the upwardly revised 3.4% in the previous month but slightly better than the decline of 1.3% in April 2012. The industrial sector has remained anaemic for the past two years due to a combination of factors, which include high interest rates, the global economic slowdown and delay in project implementation. Slowing investment has added to the problem. The sector grew 1%, the slowest pace of growth in two decades in 2012-13, attracting urgent steps to reverse the trend. Deputy chairman of the Planning Commission Montek Singh Ahluwalia said the April number was disappointing. "The growth rate that has come out today is low... there is a slight upturn, but it's not strong enough," he said. The manufacturing sector, which accounts for nearly 75% of the index, rose 2.8% in April, marginally better than the decline of 1.3% in April 2012 while the electricity sector grew a paltry 0.7% in April compared with 4.6% expansion in the year-ago period. The mining sector continued to languish, declining 3% compared to a fall of 2.8%. Delayed approvals and policy lethargy have added to the woes of the crucial sector. "Fuel shortages, ongoing mining ban in some states, delays in commissioning of large projects, and moderation in demand continues to plague India's industrial sector," rating agency Crisil said in a note. The capital goods sector, a key gauge of industrial activity, rose 1% compared to a decline of 21.5% in April 2012. The sector has remained volatile for the past two years and experts have raised doubts about the quality of data. The consumer durables sector fell 8.3% in April compared with an expansion of 5.4% in April 2012. Overall, growth has slowed to a decade low of 5% in 2012-13 posing a fresh challenge to policymakers to revive growth ahead of the 2014 general elections. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEBZYjMzKR7UHvSxYnva1_lRbgCvg&url=http://timesofindia.indiatimes.com/business/india-business/Factory-output-growth-slows-to-2-in-April/articleshow/20566150.cms

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