Industry to maintain double digit growth, says Montek
December 11, 2009
By Yogesh Sapkale
Attributing the double digit industrial growth rate to stimulus packages, the Planning Commission on Friday said that the growth momentum would be maintained in the coming months, reports PTI.
"To get a growth rate well above 10% is not just a base effect. There is an element growth that is taking place, which I hope will be sustained," Planning Commission deputy chairman Montek Singh Ahluwalia told reporters.
According to data released earlier in the day, industrial production grew by a robust 10.3% in October against a paltry 0.1% in the same month a year ago, powered by manufacturing, particularly consumer durables.
Pointing out that the government’s efforts were yielding results, Mr Ahluwalia said, "We have been saying consistently that the stimulus is taking effect and the recovery process is therefore gaining ground. Our forecast about improvement in economic growth is accurate and we would be able to maintain this momentum in coming months."
The Planning Commission has projected a growth rate of 6.5% for the current financial year. The Commission, however, may revise its growth projections in view of the high growth rate of 7.9% recorded during the second quarter of 2009-10.
The strong industrial production data came days after a better-than-expected economic growth of 7.9% in the second quarter of this fiscal, reflecting that the economy would sustain the recovery provided that agriculture does not slip too much.
For the first seven months of this fiscal, industry expanded by 7.1% against 4.3% a year ago.
Manufacturing, which has almost 80% weight in the Index of Industrial Production, grew by 11.1% against (-)0.6% a year ago, when the industry faced the full impact of the global financial crisis after the collapse of US financial services icon Lehman Brothers.
Within manufacturing, consumer durables production expanded by 21% in October against (-)1.6% a year ago. Mining production grew by 8.2% in the month against 3.2% and electricity generation expanded by 4.7% compared to 4.4%.
Industrial growth for September was revised to 9.6% from the provisional estimate of 9.1%.