NEW DELHI: Industrial output expanded at a slower-than-expected 3.6% in
February, triggering concerns that low single-digit growth for the third
consecutive month could upset economic growth calculations. "We will now have to
be content with 8.2-8 .3% GDP growth for FY11," said Madan Sabnavis, chief
economist at rating firm CARE. The government expects the economy to grow 8.6%
in the year ended March 31. The IIP figure for February was dragged down by an
18.4% fall in capital goods output, data released on Monday showed. The January
number was revised to 3.95% from 3.7% estimated initially.
Most
economists expect the RBI to raise interest rates next month, as inflation
continues to be a worry for policymakers . It has raised short-term rates eight
times since April last year. A decline in mining output growth to 0.6%, possibly
because of a drop in gas production at Reliance's KG basin fields, also affected
growth. Manufacturing expanded 3.5% in February, as against 3.6% in January.
Electricity generation rose 6.7%. The cumulative industrial output for
April-February was up 7.8% from a year ago, indicating it could fall short of
expectations.
The statistics office has pegged India's GDP growth at
8.6% for the current fiscal, with an identical contribution from industry.
Planning Commission Deputy Chairman Montek Singh Ahluwalia expects farm
performance to be better than the projected 5.4%, which will make up for the
decline in industrial output. "I don't think that (the drop in industrial
growth) will make a difference," he said. Deutsche Bank Chief Economist Taimur
Baig, however, expects a stronger 8-9 % IIP growth from May-June , when the base
effect wanes off
ANIMA SINHA
PGDM - 2 sem
February, triggering concerns that low single-digit growth for the third
consecutive month could upset economic growth calculations. "We will now have to
be content with 8.2-8 .3% GDP growth for FY11," said Madan Sabnavis, chief
economist at rating firm CARE. The government expects the economy to grow 8.6%
in the year ended March 31. The IIP figure for February was dragged down by an
18.4% fall in capital goods output, data released on Monday showed. The January
number was revised to 3.95% from 3.7% estimated initially.
Most
economists expect the RBI to raise interest rates next month, as inflation
continues to be a worry for policymakers . It has raised short-term rates eight
times since April last year. A decline in mining output growth to 0.6%, possibly
because of a drop in gas production at Reliance's KG basin fields, also affected
growth. Manufacturing expanded 3.5% in February, as against 3.6% in January.
Electricity generation rose 6.7%. The cumulative industrial output for
April-February was up 7.8% from a year ago, indicating it could fall short of
expectations.
The statistics office has pegged India's GDP growth at
8.6% for the current fiscal, with an identical contribution from industry.
Planning Commission Deputy Chairman Montek Singh Ahluwalia expects farm
performance to be better than the projected 5.4%, which will make up for the
decline in industrial output. "I don't think that (the drop in industrial
growth) will make a difference," he said. Deutsche Bank Chief Economist Taimur
Baig, however, expects a stronger 8-9 % IIP growth from May-June , when the base
effect wanes off
ANIMA SINHA
PGDM - 2 sem
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