Saturday 11 October 2014

Industrial output growth crawls in August





Government data released on Friday showed industrial output rose 0.4%, unchanged from the previous month’s level.



NEW DELHI: Industrial output remained weak in August as the manufacturing sector declined and consumer demand remained muted, posing a challenge for the Narendra Modi administration that is battling to revive growth.

Government data released on Friday showed industrial output rose 0.4%, unchanged from the previous month's level, largely dragged down by the manufacturing sector that fell an annual 1.4% in August compared to a decline of 0.2% in the year earlier period. The electricity sector rose 12.9% year-on-year compared to a growth of 7.2% in August 2013.


Some economists attributed the sluggish number to fluctuation in some sectors such as radio, TV and communications, which fell 49% year-on-year.


They said they were hopeful of a better showing in the months ahead as investments start flowing in and projects get off the ground. But the data triggered calls for urgent steps to revive the sector, crucial for boosting overall economic growth and creating jobs.

"A broad-based investment revival is unlikely to set in until prevailing structural concerns are resolved, including issues related to the ease and cost of land acquisition," said Aditi Nayar, economist at rating agency


The capital goods sector, a barometer of economic activity fell an annual 11.3% in August compared to a decline of 2% year-on-year in August 2013. Consumer goods fell an annual 6.9% compared with a decline of 0.9% in the year earlier period, while consumer durables declined 15% year-on-year in August compared with a contraction of 8.3%.


India Inc urged the government to jump start reforms and accelerate project approvals to revive growth.


"There is need for taking cognizance of the slow growth of industrial production and take steps to revive investment and stimulate demand in the economy," said Chandrajit Banerjee, director-general at







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