Expect IIP numbers to improve in 2nd half of FY'14: PMEAC

Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan today expressed the hope that India's industrial output growth will pick up in the second half of the current fiscal year.

 

"I see improvement (in IIP numbers) coming along as we go further during the year. I am hoping a better performace in the second half of the year," Rangarajan said here.

 

After recording modest growth in July, industrial output again slowed down sharply to 0.6% in August mainly on account of a contraction in manufacturing and mining.

 

Factory output, which recorded a growth of 2.8% in July, remained almost flat year-on-year because of a slump in production of consumer goods and durables.

 

The output, measured on the Index of Industrial Production (IIP), was 2% in August last year.

 

As per the data released by the government today, IIP for April-August worked out to be 0.1% compared with 0.2% in the same period of 2012-13 financial year.

 

The IIP figure for July has been revised upward at 2.8% from 2.6%, it said. It had contracted by 1.8% in June.

 

The manufacturing sector, which constitutes over 75% of the index, contracted by 0.1% in August as against an expansion of 2.4% in the year-ago period.

 

During April-August, the sector saw a decline of 0.1% compared with a flat growth in the same period last year.

 

The mining sector, with a weight of about 14% in the IIP, showed a contraction of 0.2% in August as against a decline of 0.3% in the same month last fiscal.

 

As per the data, output of capital goods, a barometer of demand, showed a decline of 2% as against a contraction of 4.4% in August 2012.

 

However, on cumulative basis, the segment showed an expansion of 0.8% in April-August as against a sharp contraction of 14.4%.