During the year 2006-07, the index of industrial production (IIP) registered an accelerated double-digit growth of 11.5%, which is the highest growth since 1995-96 when the growth recorded was 13.1%. The Reserve Bank of India in its September bulletin released Wednesday said The IIP growth during the year was led by strong growth of the manufacturing sector at 12.5 % – the highest since 1995-96 (14.1%). Both mining and electricity sectors also recorded accelerated growth at 5.3% and 7.3%, respectively.
The analysis was based on the data on index of industrial production (IIP) for2006-07 (April-March) and industry-wise production data released by the ministry of statistics and programme implementation. Growth across seventeen manufacturing industry groups remained well-diversified and 16 out of 17 industry groups recorded positive growth during 2006-07.
As per use-based classification; basic, intermediate and capital goods sectors recorded accelerated double-digit growth, while consumer goods sector posted decelerated growth during the year.
Led by strong investment and consumption demand, the industrial upsurge entered the fifth year of expansion in 2006-07. The growth in manufactured goods sector was led by ?machinery and equipment?, ?basic metal and alloy industries? and ?chemicals and chemical products?. Electricity sector recorded a higher growth of 7.3% during the year on the back of higher generation of electricity in hydro power plants as well as improved plant load factor (PLF) in thermal power plants.
Growth in the mining sector at 5.3% was impressive as it recovered from the previous three years of decelerated growth performance ? from 5.3% in 2003-04 to 1% in 2005-06.
Enhanced mining activity in respect of coal and other minerals as also recovery in crude oil production in Mumbai High (where the production was affected on account of a major fire in July 2005) propped up the mining sector in 2006-07 and consequently its relative contribution to the IIP growth increased from 1% in 2005-06 to 3.4% in 2006-07, the RBI said.
