Bogged down by a poor show by the manufacturing sector, especially capital goods, industrial growth contracted by 1.8 per cent in June. This is the third such slide in four months, causing further deterioration in the overall economic scenario.
Planning Commission Deputy Chairman Montek Singh Ahluwalia, as well as Finance Minister P. Chidambaram, took up the issue of our dwindling economy at his maiden press briefing earlier this week, dubbed the ‘Index of Industrial Production (IIP)’ numbers for June as “disappointing” and reiterated the need to promote critical sectors to boost growth.
Ahluwalia did not sound optimistic either. At the IIP data released today, he said, “ As per the data, industrial growth in June declined to minus 1.8 per cent from a robust expansion of 9.5 per cent in the same month a year ago.”
No surprise, therefore, that the manufacturing sector as a whole ended up in a poor zone with a 3.2 per cent contraction in growth during June.
The manufacturing sector, which constitutes over 75 per cent of the IIP basket, also reflected poorly in the April-June quarter with a decline by 0.7 per cent in growth as compared to a 7.7 per cent growth in the same quarter of 2011-12.