Monsoon impacts Sept industrial growth rate

Industrial growth in September 2004 was 7.7 per cent as against 7.5 per cent in the corresponding month last year. The growth was, however, below the 7.9 per cent growth reported in August this year.

"The growth is slightly below expectations. However, there is also gross underestimation in a number of categories, particularly transport equipment," said Saumitra Chaudhuri, Economic Adviser, ICRA.

The data is slightly below our expectations of around 8 per cent.

Going forward, it remains to be seen how much of the momentum can be maintained in the face of the effects of a poor monsoon," said Sanjeet Singh, economist at ICICI Securities. "Most probably, the November data will give a better idea about the impact of the monsoon on output."

Manufacturing grew at 8 per cent the same as in September 2003, while the mining sector registered a marginal decline in growth at 4 per cent compared to 4.5 per cent a year ago. The electricity sector, however, reported 7.6 per cent growth, compared to 6 per cent in the corresponding month last year.

In the first six months of the fiscal, strong growth performance in the manufacturing sector led to the industry growing at 7.9 per cent, as compared to 6.2 per cent in the same period last year.

According to quick estimates of the index of industrial production, the manufacturing sector, representing nearly three-fourths of the weightage of IIP, grew by 8.2 per cent during April-September 2004, over 6.7 per cent in the same period last fiscal.

The mining sector grew at 4.9 per cent in April-September 2004-05 over 4.2 per cent in the same period last year. The electricity sector registered a 7.7 per cent growth in the first half of the current fiscal as against only 3 per cent last year.

As per the use based classification, all categories, except intermediate goods, posted an increase in growth.

Consumer durables registered the highest 20.3 per cent growth in September 2004 as against 11.3 per cent in September 2003, followed by capital goods at 15.1 per cent as against 13.8 per cent last year, consumer goods at 10.4 per cent as against 7.5 per cent, consumer non-durables at 6.8 per cent over 6 per cent, basic goods at 6.7 per cent against 5.2 per cent in September 2003.

However, the intermediate goods witnessed a sharp decline in growth. The sector reported 3.4 per cent growth in September 2004 as against 8 per cent in September 2003.

In the first six months of this fiscal, the index recorded an upward trend for all categories except consumer non-durables. Growth in consumer non-durables dipped to 6.7 per cent in April-September 2004 against 8.9 per cent during the year-ago period. The consumer durables segment clocked the highest 15.2 per cent growth during the first six months of 2004-05 as against 6.7 per cent in the same period last year.

Consumer durables segment was followed by capital goods at 14.5 per cent as against 10 per cent growth in the first six months of 2003-04. Consumer goods witnessed a marginal increase at 8.8 per cent as compared to 8.3 per cent growth in april-sep 2003. Growth for intermediate goods also increased to 7.7 per cent from five per cent, while basic goods clocked 5.2 per cent against 4.3 per cent during the year-ago period.