Factory growth slips in April

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New Delhi: Showing no signs of recovery, the industrial output slipped further to a ‘disappointing’ two per cent in April increasing the clamour for rate cut by the RBI and speedy clearances of projects to boost investment.
The index of industrial production (IIP) in April has moderated from 3.4 per cent in March on account of dismal performance of manufacturing and mining sectors, although it is better compared to a contraction of 1.3 per cent in the same month of last fiscal.
Describing the IIP in April as “disappointing”, Planning Commission deputy chairman Montek Singh Ahluwalia said: “The growth rate that has come out is low. There is a slight upturn, but its not strong enough.”
The decline in factory output has mainly been on account of dismal performance of key sectors like manufacturing, mining, power and capital goods sectors. Manufacturing sector, which constitutes over 75 per cent of the index, grew by a meagre 2.8 per cent in April. In the year-ago period, however, it had declined by 1.8 per cent. Power generation grew by just 0.7 per cent in April this year compared to a growth of 4.6 per cent in same month last year.
The mining sector output contracted by three per cent in April this year compared to a decline in the production by 2.8 per cent last year. Moreover, Capital goods output also saw a growth of just one per cent in April.