India’s industrial output grows at 5.6 percent in August

NEW DELHI - India’s industrial production in August grew at a much slower rate of 5.6 percent compared to the revised figures of 15.2 percent in the previous month, with a decline in capital goods output adding to the base effect, according to official data released Tuesday.

August’s index of industrial production (IIP) numbers was also lower than the 10.6 percent increase seen in the like month of 2009.

During this fiscal, for April-August, industrial output averaged at 10.6 percent against 5.9 percent in the like period of previous fiscal.

Though 14 out of the 17 industries, which constitute the IIP, posted positive growth in August, the quantum of increase was modest, as per data released by the Central Statistical Organisation (CSO).

The manufacturing sector, which constitutes a major chunk of the IIP, grew at 5.9 percent in August compared to 10.6 percent in the same month an year-ago.

Electricity generation too was in slump, nudging up just 1 percent in the month under review as against 10.6 percent in August 2009.

The mining sector grew at a relatively faster rate of 7 percent in August, compared to 11 percent last year.

Capital goods, which was the fastest growing sector in July, saw output declining by 2.6 percent in August.

Among other sectors, intermediate goods production rose 10 percent while basic goods output was up 3.7 percent.

Experts earlier had said the industry could grow in single-digit for July because of the base effect, but the numbers came much lower than expected.

As a result, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange dipped more than 232 points or over a percent to 20,107.25 points around noon Tuesday.