India's industrial output grows by 1.8 per cent in Dec 2011

New Delhi, Feb 10 (PTI) India’s industrial production grew by just 1.8 per cent year-on-year in December 2011 due to contraction in mining and capital goods sectors and a lower manufacturing sector growth. Factory output growth, as measured by the Index of Industrial Production (IIP), was at 8.1 per cent in December 2010. Output of the manufacturing sector, which constitutes over 75 per cent of the index, rose at a lower rate of 1.8 per cent in December, compared to a growth of 8.7 per cent in the same month of 2010, according to the official data released Friday. Besides, capital goods sector witnessed a contraction of 16.5 per cent, against a growth of 20.2 per cent in the same month in 2010. Mining output too contracted by 3.7 per cent in December, against 5.9 per cent growth in the year ago period. However, power generation witnessed a good growth of 9.1 per cent in December 2011, compared to 5.9 per cent in the year ago period. During the month, 15 out of 22 industry groups witnessed a positive growth. During the month output of basic goods went up by 4 per cent, against 7.8 per cent in the year ago period. However, intermediate goods witnessed a contraction of 2.8 per cent, against 8.1 per cent growth in December 2010. Consumer goods witnessed a 10 per cent upswing against a low growth of 3.5 per cent last year. Industrial growth during the first three quarters of fiscal 2011-12 (April-December) stood at 3.6 per cent, against 8.3 per cent in corresponding period of the previous fiscal. The lower industrial output growth in the month was on expected lines as the eight core industries had registered a muted growth of 3.1 per cent growth in December, mainly due to slackening output of crude oil, steel and natural gas. The core sector had grown by 6.3 per cent in December 2010. The eight industries together contribute 37.9 per cent to the overall Index of Industrial Production (IIP). The decline in IIP numbers, experts said, will make a good case for further rate cuts by the Reserve Bank of India. Last month the country’s cental bank had cut cash reserve ratio (CRR) by 50 basis points to 5.5 per cent. PTI