Industrial production to fall to 4.8% this fiscal: CMIE

Industrial production would fall from 5.1 per cent to 4.8 per cent this fiscal due to a dip in agricultural production, according to economic think-tank CMIE.     

"We have revised our forecast for growth in industrial production in 2009-10 from 5.1 per cent earlier to 4.8 per cent in light of the failure of the monsoon," Centre for Monitoring Indian Economy (CMIE) said in its monthly report.     

The fall in agriculture production has a direct bearing on the growth in GDP in 2009-10. Its indirect impact on the growth is also significant.     

CMIE added that it has dropped its forecast for sugar production during 2009-10 due to an expected fall of eight per cent in sugarcane.

Similarly, the institute lowered its edible oil production forecast.     

"While the industrial sector will face agro raw material supply problems in 2009-10, it will see a substantial increase in capacities," CMIE said.

These capacities are mostly in non-agro industries, it added.     

Cement capacities are expected to increase by 27 per cent during the year, those for aluminium by 25 per cent, commercial vehicles by 50 per cent, cars 25 per cent and two-wheelers 18 per cent, it pointed out.     

"These capacity additions are expected to accelerate the growth in industrial production. Therefore we expect industrial production to grow by 4.8 per cent this fiscal compared to 2.4 per cent growth registered in 2008-09."