IIP growth in July likely to remain in single-digits: Experts

New Delhi: Industrial output growth is likely to be sluggish in the range of 7%-8% in July, the second month in a row this fiscal when the factory output may expand by only single digit, reports PTI.

The Index of Industrial Production (IIP), which measures the industrial growth, for July is scheduled to be released by the government tomorrow.

Industrial growth had slipped to a 13-month low of 7.1% in June as manufacturing output dropped. It had fallen to single-digit growth after being in double-digits for eight consecutive months.

"We know the industrial growth is going to slow down. It is not going to be what it was. It is going back to base level," Planning Commission deputy chairman Montek Singh Ahluwalia said.

He, however, exuded optimism that despite slowdown India's gross domestic product (GDP) growth in this fiscal will reach the 8.5% target set by the government.

"Agriculture growth, which was slightly lower in the first half, should be better in second half. I remain hopeful that 8.5% (economic growth for the fiscal) is possible," Mr Ahluwalia said.

The country's GDP had grown by 8.8% in the first quarter, against 6% in the April-June period of last fiscal.

Global rating agency Crisil said it expected the IIP growth in July to be 7.6%.

"Our forecast is of 7.6% growth (in IIP figure for July). We believe sectors like auto and transportation would perform well, while cement will be weak. Growth of capital goods segment will also slow down," Crisil chief economist D K Joshi said.

He also attributed the low growth prospect to wearing off of the base effect.

"The growth during the first few months of 2009 was low which resulted in big jumps in growth rates in factory output in the same months of this year. Now that low base effect is no longer true," Mr Joshi added.

Senior economist and former director of Indian Council of Research in International Economic Relations Rajiv Kumar concurred with this view.

"The IIP growth may come down. The low base effect has withered away. And I am not sure how strongly the growth in manufacturing sector will perform," he said.


India Inc mops up Rs56,169 crore through debt on private placements

New Delhi: India Inc mopped up a whopping Rs56,169 crore through debt on a private placement basis during the first quarter of current fiscal, recording a growth of 31% compared to the same period a year earlier, reports PTI.

The April-June quarter of the current fiscal witnessed a mobilisation through debt (bonds) on private placement basis of Rs56,169 crore, up 31%, as against Rs42,715 crore mobilised in the corresponding period of the previous year, as per a report released by Prime Database today.

The funds raised during the June quarter was mobilised by a handful of 79 institutions and corporates. Only such deals which have a tenor and put/call option of more than one year are reflected in this database.

The sector that witnessed the most significant growth was the public sector undertakings (PSUs), whose mobilisation went up by 114% from Rs2,910 crore to Rs6,235 crore, Prime Database CMD Prithvi Haldea said in a statement.

According to the report, the biggest mobilisation came from all-India financial institutions/banks who recorded a 48% increase to Rs33,520 crore, compared to Rs22,650 crore in the corresponding period of the previous year.

The highest mobilisation through debt private placements during the period was by Power Finance Corporation (PFC) (Rs6,678 crore), followed by IDFC (Rs4,420 crore), HDFC (Rs3,850 crore), IRFC (Rs3,455 crore), Power Grid Corporation of India (PGCIL) (Rs2,880 crore) and LIC Housing (Rs2,202 crore).

"On an industry-wise basis, the financial services sector continued to dominate the market, collectively raising Rs40,605 crore or 73% of the total amount. Power ranked second with a 10% share (Rs5,825 crore)," Mr Haldea said.

A fall, though marginal, in mobilisation came from private sector, down to Rs16,265 crore, compared to Rs16,961 crore in the corresponding period of the previous year, he added.

India Inc had raised Rs1.89 lakh crore through corporate bonds on private placement basis in last fiscal, an increase of 9% over the previous financial year.


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