India's Industrial output growth slows to 7.8%

Poor performance of the manufacturing and mining sectors pulled down overall growth of industry to 7.8% in 2010-11 from 10.5% in the previous fiscal. 

Factory output in March, as measured in terms of the Index of Industrial Production (IIP) released on Thursday, also witnessed lower growth of 7.3%, compared to 15.5% expansion in the same month a year ago. 

However, the performance in March was an improvement compared to 3.6% growth registered in February this year. 

The manufacturing sector, which accounts for almost 80% of the index, saw its annual growth fall to 8.1% in 2010-11 from 11% in the previous fiscal. 

The sector has also shown poor performance in the month of March, with meagre growth of 7.9%, compared 16.4% expansion in the same month last year. 

The mining sector also saw a decline in growth to 5.9% in 2010-11 from 9.9% in the previous fiscal.

For March, the sector's growth was a mere 0.2%, compared to 12.3% in the same month of 2009-10.

The capital goods segment was among the most affected as it grew by just 9.3% in 2010-11, compared to a robust 20.9% in the previous fiscal. 

In March this year, the growth in capital goods production slowed to 12.9% from 36% in the same month of 2010. 

During the last fiscal, growth of the electricity sector slowed to 5.6% as against 6% in 2009-10.

During March, the sector reported a growth of 7.2%, compared to 8.3% in the corresponding month of 2009-10. 

Overall, 13 out of 17 industry groups achieved positive growth in March this year. 

Production in the consumer non-durables segment went up by 2.2% during the 2010-11 fiscal, as against 0.4% in 2009-10. 

The consumer durables segment grew by 20.9 per cent in 2010-11, down from 24.6 per cent expansion in 2009-10. 

Overall, consumer goods output reported a rise of 7.5 per cent last fiscal, as against 6.2 per cent in 2009-10.

Intermediate goods reported a rise of 8.8% during 2010-11, down from 13.6% in the previous fiscal.

India plans to unveil a new industrial output index in June that will use a different base year and have about 400 items, up from the 283 in the current index, to give a more “realistic picture” of industrial output.

India’s exports climbed 34.4% to $23.9 billion in April from a year earlier. Imports gained 14.1% to $32.8 billion.