Financial Daily from THE HINDU group of publications
Friday, Sep 13, 2002
Industry & Economy
Industrial growth 6.4 pc in July CSO data point to revival trend
NEW DELHI, Sept. 12
INDIAN industry registered an impressive 6.4 per cent growth during July, fuelling hopes of a revival in manufacturing activity.
According to the Central Statistical Organisation (CSO), the 6.4 per cent year-on-year rise recorded in the official Index of Industrial Production (IIP) during July 2002 was an improvement over the corresponding growth rate of 2.6 per cent for July 2001.
The cumulative increase in the `general' IIP for April-July 2002 amounted to 4.7 per cent, which was also higher than the corresponding growth rate of 2.3 per cent recorded during the first four months of the previous fiscal.
Further, all the three major sectors constituting the general index - manufacturing, mining and electricity - registered higher growth rates during July 2002 as well as the April-July 2002 period.
While the cumulative growth rate during April-July 2002 for `manufacturing' was 4.3 per cent (compared to 2.7 per cent during April-July 2001), the corresponding figures for `mining' and `electricity' stood at 8.4 per cent (minus 1.8 per cent) and 4.3 per cent (2.8 per cent), respectively.
Similarly, for July 2002, the growth rates for manufacturing, mining and electricity, at 5.7 per cent, 12.5 per cent and 6.2 per cent respectively, were higher than their corresponding July 2001 levels of 2.9 per cent, minus 2.6 per cent and 4.7 per cent.
In other words, the current revival trend seems to be across all major industrial sectors.
These trends are also visible in the CSO's data pertaining to the `use-based' classification of the IIP.
Production of `capital goods' - a proxy for investment demand in economy - went up by 9.7 per cent in July 2002, compared to a 7.4 per cent decline recorded in the same month last year.
For the April-July 2002 period, capital goods registered a five per cent growth, against minus 6.3 per cent in the first four months of the previous fiscal.
Similarly, for `basic goods', the growth rates for both July 2002 as well as April-July 2002, at 7.1 per cent and 5.8 per cent, were higher than their corresponding previous year's levels of 0.3 per cent and 1.2 per cent, respectively.
The same was the case with `consumer non-durables', the output of which went up by 15.6 per cent in July 2002 (against 5.7 per cent in July 2001) and 10.7 per cent (4.3 per cent) during April-July 2002.
The picture was less buoyant though for the other sub-sectors.
During July 2002, the growth rates for `intermediate goods' and `consumer durables', at 2.3 per cent and minus 7.6 per cent, were lower than their corresponding July 2001 levels of 3.1 per cent and 15.2 per cent, respectively.
Even for April-July 2002, the growth rates for intermediate goods and consumer durables, at 0.7 per cent and minus 1.4 per cent, were below their corresponding April-July 2001 levels of 3.2 per cent and 9.3 per cent, respectively.
A more detailed classification of the IIP at `2-digit level' reveals that the ongoing manufacturing turnaround has been mainly led by `textile products', which grew by 18.8 per cent during the first four months of the current fiscal.
But interestingly, this high growth in textile products (which includes ready-made garments and wearing apparel) has come in spite of the continued slump in the downstream industries (yarn, fibre, etc), including cotton textiles (minus 3.3 per cent) and wool, silk and man-made fibre textiles (minus 3.8 per cent).
The other high-to-medium growth industries have been beverages and tobacco products (15.5 per cent), basic chemicals expect petro-products and coal-based products (7.9 per cent), transport equipment (9.5 per cent) and base metals and alloy industries (6.4 per cent).
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