India’s industrial growth rate declines further during April-June

Global economic uncertainty, sluggish domestic demand and hardening of interest rates  have pushed down the average Index for Industrial Production (IIP) between April-June 2012-13 further to 3.6 per cent compared to the corresponding period of 2011-12 which recorded 4.4 per cent.  

The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry has released the second quarter growth data covering eight core industries  -- Coal, Crude Oil, Natural Gas,  Petroleum Refinery Products, Fertilizers, Steel, Cement and Electricity.  

Of the eight industries, crude oil, natural gas and fertilizer showed negative growth of 0.5, 1.1 and 12.2 per cent, respectively while cement sector recorded the highest growth of 9.9 per cent followed by coal and electricity at 6.4 per cent each, Minister of State for Commerce and Industry, Jyotiraditya M. Scindia told the Lok  Sabha  today.

 

However, the annual growth rates of three key sectors – mining, manufacturing and electricity -- have showed negative growth of 0.1 per cent during this quarter compared to corresponding period of 2011-12 which recorded a healthy 2.9 per cent, the data revealed.  Mining and manufacturing industries played spoilsport with -1.1 and -0.7 percent growth, respectively,  while electricity clocked 6.4 per cent growth, still less than last year’s figure of 8.2 per cent.

There has been a moderation in the growth rates of both overall IIP and the Eight Core Industries in 2011-12 and April-June, 2012-13.  Major reasons for the moderation include global economic uncertainty, sluggish domestic demand, hardening of interest rates etc. Regulatory and environmental issues, court orders, decline in international demand for metallic minerals etc. are also affecting production, especially in the mining sector.