NEW DELHI, Aug 12 (PTI): At a time when the weak monsoon is threatening to reduce farm output, Indian industry started showing signs of revival as it clocked 7.8 per cent growth in June, reversing the extremely bleak trends that had set in since the collapse of Lehman Brothers in September 2008.
Effects of fiscal and monetary stimulus were visible as manufacturing, the worst-affected, grew by a whopping 7.3 per cent in June over 6.1 per cent a year ago.
With manufacturing constituting about 80 per cent in the index of industrial production (IIP), industrial growth at around eight per cent in June was way above the 5.4 per cent a year ago.
For the first time after Lehman Brothers collapsed, segments like capital goods, consumer durables, consumer non-durables did not show contraction in output.
Industrial growth stood at 3.7 per cent in the first quarter of this fiscal against 5.3 per cent a year ago. Given the fact that industry started contracting since September, its growth, if this trend persists, will be higher because of a low base.
With the weakening monsoon casting a shadow on farm growth, this kind of industrial growth may offset the adverse impact partly. Planning Commission Deputy Chairman Montek Singh Ahluwalia said, “I always expect the positive trends (in industrial growth) to continue.
However, the weak monsoon could have some impact on overall GDP.” Consumer durables and capital goods grew by 15.5 per cent and 11.8 per cent, respectively, in June, the strongest expansion in several months.
As many as 12 out of 17 industrial segments in June recorded positive growth. However, processed food continued to decline, along with jute, beverages, tobacco, etc. Analysts attributed high industrial growth to the impact of stimlus measures taken by the Government and RBI.
Rating agency Crisil Principal Economist D K Joshi said, “This is more than expected. It is mainly driven by the fiscal and monetary stimulus. Interest rate softening has started showing positive impact on the industry. However, monsoon can have a dampening effect on growth.”
Manufacturing grew by 3.2 per cent in the first quarter against 5.8 per cent a year ago, mining by 7.3 per cent against four per cent, and electricity by six per cent against two per cent. Meanwhile, industrial growth in May was revised downwards to 2.2 per cent compared to 2.7 per cent estimated earlier.
Effects of fiscal and monetary stimulus were visible as manufacturing, the worst-affected, grew by a whopping 7.3 per cent in June over 6.1 per cent a year ago.
With manufacturing constituting about 80 per cent in the index of industrial production (IIP), industrial growth at around eight per cent in June was way above the 5.4 per cent a year ago.
For the first time after Lehman Brothers collapsed, segments like capital goods, consumer durables, consumer non-durables did not show contraction in output.
Industrial growth stood at 3.7 per cent in the first quarter of this fiscal against 5.3 per cent a year ago. Given the fact that industry started contracting since September, its growth, if this trend persists, will be higher because of a low base.
With the weakening monsoon casting a shadow on farm growth, this kind of industrial growth may offset the adverse impact partly. Planning Commission Deputy Chairman Montek Singh Ahluwalia said, “I always expect the positive trends (in industrial growth) to continue.
However, the weak monsoon could have some impact on overall GDP.” Consumer durables and capital goods grew by 15.5 per cent and 11.8 per cent, respectively, in June, the strongest expansion in several months.
As many as 12 out of 17 industrial segments in June recorded positive growth. However, processed food continued to decline, along with jute, beverages, tobacco, etc. Analysts attributed high industrial growth to the impact of stimlus measures taken by the Government and RBI.
Rating agency Crisil Principal Economist D K Joshi said, “This is more than expected. It is mainly driven by the fiscal and monetary stimulus. Interest rate softening has started showing positive impact on the industry. However, monsoon can have a dampening effect on growth.”
Manufacturing grew by 3.2 per cent in the first quarter against 5.8 per cent a year ago, mining by 7.3 per cent against four per cent, and electricity by six per cent against two per cent. Meanwhile, industrial growth in May was revised downwards to 2.2 per cent compared to 2.7 per cent estimated earlier.
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