"It is surprising as to how growth in the capital goods sector can come about if the main sub-groups like commercial vehicles, textile machinery, electrical cables, earth moving vehicles are all showing negative growth," M Roy, deputy director general of the Confederation of Indian Industries (CII) told The Financial Express.

What has added to the industry's worries is the recent suspension of the industrial data by DoS which had alleged that the lack of high-response data quality from the department of industrial policy and promotion (DIPP) as the reason for the CSO's decision. The DIPP is an important source of obtaining data for 213 items out of thetotal 285 items in the manufacturing sector.

However, last week, the CSO patched up with the industry ministry and re-issued the industrial indices in the last week of January. These data have shown a high 10.2 per cent cumulative growth of the capital goods sector. The reported growth is as much as three percentage points above the cumulative growth achieved in the same period in the previous fiscal.

Sources in DoS said "The industry ministry may have picked up the earlier data for the previous month and added an averaged figure to come up with the latest data."

This, industry experts feel, could have highly distorted the data to give a higher tally finally on the secondary derivatives.

With this, the DoS is planning to review the sectoral growth in the coming months. "We would be again revising the data on the capital goods sector,," said AC Kulshreshtha, deputy director general, department of statistics, Planning Commission.

Industrial growth has averaged a 10.2 per cent growth at a cumulativelevel for the first eight months of the current fiscal as compared to 7.2 per cent in the corresponding period in the previous fiscal.

The sector which commands as much as 9.6 per cent weightage in the index for industrial production (IIP) as per the revised 1993-94 series, has faced massive under-utilisation of capacity in recent months.

Industry sources have pointed out that as much as 15-20 per cent of the capital goods companies had capacity utilisation of less than 15 per cent while as many as 50-55 per cent had a capacity utilisation of less than 50 per cent and 15-20 per cent had a capacity utilisation of less than 75 per cent and only 10 per cent had a capacity utilisation of more than 75 per cent.

Since the beginning of the second half of the current fiscal, the industrial production has been reporting an ascending path with a growth of 7.2 per cent at a cumulative level for the first half of the current fiscal.

Thereafter, growth has increased to 10.0 per cent against 7.9 per cent for Aprilto October while it has grown by 10.2 per cent as against 7.2 per cent for the latest recorded month November from the beginning of the current fiscal.