Industrial output shrinks 0.6%, dashes economy recovery hopes

May 10 2013, 15:31 IST
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The slump in IIP data for December 2012 has come as a surprise to many experts. (Reuters) The slump in IIP data for December 2012 has come as a surprise to many experts. (Reuters)
SummaryThe Index of Industrial Production (IIP) had grown by 2.7 per cent in December, 2011.

The growth in the output of these goods was at 3.7 per cent in April-December 2012, compared to 5.1 per cent in same period previous fiscal.

The consumer non-durables output dipped by 1.4 per cent in December, as against a growth of 13.8 per cent in the same month a year-ago. This segment grew by 1.7 per cent in the nine-month period of this fiscal, as against 6.1 per cent in the same period of 2011-12.

The intermediate goods production also contracted by 0.1 per cent in December, 2012 compared to a decline in output by 1.5 per cent in same month a year ago.

During the April-December period, this segment recorded a growth of 1.6 per cent, compared to a contraction of 0.7 per cent in the first nine months of last fiscal.

The basic goods output grew by 2.6 per cent in December as compared 5.5 per cent in the same month of 2011. During the April-December period of this fiscal, output of these goods rose 2.7 per cent compared to 6.3 per cent in the nine-month period a year ago.

Power generation grew by 5.2 per cent in December last year, as against 9.1 per cent in same month of 2011. The electricity generation in the April-December period this

fiscal stood at 4.6 per cent, as against 9.4 per cent in a year-ago period.

In terms of industries, 12 out of 22 groups in the manufacturing sector have shown negative growth in December, 2012 as compared to the same month in 2011.

India economy recovery hopes dashed as output unexpectedly shrinks

(Reuters): India's industrial production unexpectedly shrank for a second straight month in December, weighed down by weak investment and consumer demand, casting doubt on Finance Minister P. Chidambaram's view that Asia's-third largest economy is showing signs of recovery.

The index of industrial production (IIP) fell 0.6 percent annually in December, data released by the Central Statistics Office showed on Tuesday.

A Reuters poll of 24 economists had expected growth of 1.1 percent, after output shrank 0.8 percent in November.

Manufacturing output, which accounts for the bulk of industrial production and contributes about 15 percent to overall gross domestic product (GDP), fell 0.7 percent in December from a year earlier.

"What is clear is that any meaningful industrial recovery is eluding us. Demand destruction is far more well entrenched than we thought," said Sujan Hajra, chief economist at brokerage firm Anand Rathi

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