Industrial growth slows to 4.1% in February

Growth in industrial production slowed to 4.1 per cent in February, primarily owing to a poor show by the manufacturing sector and the consumer goods segment.

Growth in factory output, as measured by the index of industrial production (IIP), stood at 6.7 per cent in February. The manufacturing sector output, which constitutes over 75 per cent of the index, rose just four per cent in February, compared with 7.5 per cent in February 2011. Consumer goods output recorded a slowdown, as production declined 0.2 per cent in February, compared with 13.4 per cent in the same month last year.

However, the capital goods sector recorded 10.6 per cent growth, against a contraction of 5.7 per cent in the same month last year. At 2.1 per cent, growth in mining output, too, showed improvement. It stood at 1.2 per cent in the year-ago period. Power generation saw eight per cent growth, compared with 6.8 per cent in the year-ago period.

The output of basic goods rose 7.5 per cent, against 5.5 per cent in the same period last year. However, intermediate goods recorded a contraction of 0.6 per cent, against 6.3 per cent growth in February 2011.

The slow growth of IIP, at 3.5 per cent, during the April-February period, may prompt the Reserve Bank of India to cut short-term lending and borrowing rates in its annual monetary policy next week.