The Hindu Business Line : IIP registers 9.5% growth in April

Buoyed by a more than 10 per cent growth in the manufacturing sector and above 24 per cent growth in production of capital goods, the overall Index for Industrial Production (IIP) registered a growth of 9.5 per cent in April 2006 as against 8.1 per cent growth recorded in April 2005, according to the official data released here today by the Central Statistical Organisation (CSO).

The increase in the IIP in the first month of the current fiscal is substantial compared to the revised rate of growth of 8.2 per cent recorded in the preceding month, which was also lower compared to 8.4 per cent growth in March 2005.

80 p.c weightage

The manufacturing sector grew by 10.4 per cent in April compared to 9.2 per cent in the same month last fiscal, the release said.

Manufacturing, including automobiles, steel and others, has the greatest weightage in the index at 80 per cent.

The growth in the mining sector, which also includes coal and crude oil production, grew by 4.3 per cent (2.8 per cent). Electricity output also grew by 5.6 per cent as against 3.1 per cent in April 2005.

Simultaneously, consumer durables output was up 10.6 per cent from the earlier year while production of capital goods, a key barometer of industrial activity, improved by 24.9 per cent.

It may be mentioned that the Reserve Bank of India, in a rare move between scheduled reviews, raised interest rates by 25 basis points last Thursday, taking its key short-term rate to 5.75 per cent — its highest in four years — to curb accelerating inflation.

The overall output for March 2006 has been revised at 8.2 per cent compared to the previous estimate of 7.7 per cent.

25 million jobs

The manufacturing sector is poised to create 25 million jobs by 2010, according to the Associated Chambers of Commerce and Industry of India. The textiles sector alone will provide employment opportunities to 9-10 million people by that time and is also projected to substantially enhance its contribution to the GDP, according to the chamber.

In a paper prepared on `Manufacturing: India's growth locomotive', it has also been projected that manufacturing exports from India will go up to $100 billion by 2010 from its present level of about $50 billion.

Other sectors that have tremendous growth potential to accelerate growth in manufacturing comprise machine tools, auto components, pharmaceuticals and engineering, according to the paper.