remain close to the level seen in Q2 FY14 (1.2% of GDP),” Crisil said.
The IIP data showed growth in capital goods output — a gauge for fixed corporate investment — remained tepid at 0.3% despite a favourable base of -8.5% a year before. The sector has witnessed contraction in 14 of the 20 months through November. Even the modest uptick in the second quarter in gross fixed capital formation, which rose 2.6% in the second quarter from a year earlier and gained 5% compared with the June quarter, seemed coming largely from pipeline investments and not fresh ones.
The manufacturing sector contracted by 3.5% in November, compared with -0.8% a year before. Mining inched up by 1% in November, thanks to a favourable base of -5.5% a year earlier, while the electricity segment grew 6.3%, against 2.4% during the same month last year.
Mining has remained in the negative zone for the most part since the 2011-12 fiscal, thanks to ban on illegal mines and uncertainties about coal block allocation following the Supreme Court verdict.
CII director-general Chandrajit Banerjee said the government has to ensure that projects getting cleared by the CCI are implemented on the ground. “At the same time, steps such as encouraging competition in the mining sector and taking steps to start all legal mining in the ban-affected states, speedy implementation of DMIC, fast-tracking NMP, among others would bring industry back to the path of growth. CII maintains that government policies should be complemented by the shift towards an accommodative policy announcement by the RBI in its forthcoming monetary policy to revive investment and propel demand, especially in consumer durables which are deep in the red,” Banerjee said.
Ficci president Sidharth Birla said: “Manufacturing growth is significantly affected by low growth in mining since sectors like metals that depend on minerals and have substantive weight in the index have pulled down the growth. Capital goods remain a cause for concern as growth of this sector was a meagre 0.3% over a negative base of 8.5% in November 2012.”