Industrial output during April-August was 0.4%, down from 5.6% in the same period last year
New Delhi: India's industrial growth slowed to 2.7% in August due to poor show by the manufacturing sector and contraction in capital goods output, which may prompt the Reserve Bank of India (RBI) to cut key interest rates in its second quarter policy review later this month, reports PTI.
Industrial output in the April-August period this fiscal was 0.4%, down from 5.6% in the same period in 2011-12, according to the official data.
Growth in overall factory output, as measured by the Index of Industrial Production (IIP), was 3.4% in August last year.
The manufacturing sector, which constitutes over 75% of the index, grew at slow rate of 2.9% in August, as against 3.9% in the same month last year.
The production growth in the manufacturing sector in April-August was flat, as against 6% growth in the same period in 2011-12.
Capital goods output contracted by 1.7% in August, as against 4% growth in August, 2011.
Output of capital goods contracted in the April-August period by 13.8%, as against growth of 7.3% in the 2011-12 period.
However, mining output in August grew by 2% as against contraction of 5.5% in same month last year.
The sector's production in April-August declined by 0.6%, compared to a contraction of 0.5% in same period a year ago.
Consumer goods production was up 5% in August as compared to a meagre growth of 2.1% in same month last year. During the April-August period of this fiscal, the growth in the segment was 3.5%, compared to 4.4% in the five month period a year ago. .
In all, 13 of the 22 industry groups in the manufacturing sector showed positive growth in August.
Consumer durables production growth slowed to 4% in August, compared to 5% in the same month last year.
The output of these goods registered a growth of 5.7% during April-August, as against 4.5% in the same period in 2011-12.
The consumer non-durables output growth improved to 5.8% in August, as against a contraction of 0.7% in the same month last year. This segment grew by 1.6% in first five months of this fiscal, as against 4.3% in the same period of 2011-12.
The basic goods production growth slowed to 2.8% in August, as against 5.8% a year ago. During April- August period, this segment recorded a growth of 2.8% compared to 7.6% in the five months of last fiscal
Power generation witnessed a dip in growth rate as it declined to 1.9% during August, compared to 9.5% in the same month a year ago.
Electricity generation increased by 4.8% in the April-August period of this fiscal, as against 9.5% in the same period in 2011-12.
The Reserve Bank will come out with second quarter monetary policy review on 30th October. The central bank has been holding key interest rates for some time in view of sticky inflationary pressures.