Industrial production in India shrinks 1.8 pct in October, RBI Guv Raghuram Rajan underlines inflation battle

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Analysts polled had predicted IIP in India would shrink by 1.2 pct in October; Raghuram Rajan says economy weaker than the cbank would like. AP Analysts polled had predicted IIP in India would shrink by 1.2 pct in October; Raghuram Rajan says economy weaker than the cbank would like. AP
SummaryShrinking index of industrial production (IIP) shows economic recovery fragile.

Industrial production entered the negative territory after three months, contracting by 1.8 per cent in October this year mainly due to poor performance of the manufacturing sector.

Factory output, as measured in terms of the Index of Industrial Production (IIP), grew by 8.4 per cent in October last year.

Meanwhile, IIP growth for September this year has been revised marginally to 1.96 per cent from the provisional estimate of 2 per cent.

IIP dipped by 1.8 per cent in June, 2013.

According to data released by the government, industrial output for April-October period remained flat as compared to 1.2 per cent in the same period of 2012-13.

The manufacturing sector, which constitutes over 75 per cent of the index, declined by 2 per cent in October as against a growth of 9.9 per cent a year ago.

During April-October, the sector's output contracted 0.3 per cent compared to a growth of 1.1 per cent in same period last year.

The mining sector, with a weight of about 14 per cent in IIP, also saw a contraction of 3.5 per cent in October as against a dip of 0.2 per cent in the same month last fiscal.

During April-October, the output shrank by 2.7 per cent as against a contraction of one per cent.

Power generation, however, posted a growth of 1.3 per cent in the month under review compared to 5.5 per cent a year ago. Expansion in power generation was at 5.3 per cent in April-October as compared to 4.7 per cent in the same period last year.

In terms of industries, 10 out of 22 industry groups in the manufacturing sector have shown negative growth during the month of October.

Capital goods production, a barometer of demand, showed a growth of 2.3 per cent in October 2013 compared to 7 per cent in the same month a year ago. The segment declined by 0.2 per cent in April-October as against a sharp contraction of 11.6 per cent in the comparable period.

The consumer durables segment contracted by 12 per cent in October as against a growth of 16.7

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