India's Index of Industrial Production remains negative, dips 0.5 pct in March

May 12 2014, 22:25 IST
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Analysts polled had forecast a contraction of 1.5 percent in output. (Reuters) Analysts polled had forecast a contraction of 1.5 percent in output. (Reuters)
SummaryIndia's industrial production hit by weak consumer demand, capital investments, data showed.

per cent in March against a rise of 3.2 per cent earlier, while for 2013-14 growth was 2 per cent versus 2.4 per cent in 2012-13.

Power generation increased 5.4 per cent in March compared with 3.5 per cent in the same month of 2013. Power generation rose 6.1 per cent in 2013-14 against growth of 4 per cent in 2012-13.

The mining sector, with a weight of about 14 per cent in the IIP, declined 0.4 per cent in March as against a dip of 2.1 per a year earlier. During 2013-14, mining output shrank 0.8 per cent compared with a decline of 2.3 per cent in 2012-13.

Negative IIP growth is extremely disappointing: Industry

Expressing disappointment over the factory output numbers for March, India Inc today said the new government should implement quick and bold reforms in order to boost manufacturing sector's growth.

"The outlook for the manufacturing sector, as things stand, seems to be disappointing and bleak. Weak demand and investment conditions continue to plague the sector.

"We look to the next Government and hold out strong hope that quick and bold reforms and implementation will enable a high growth path where manufacturing will play a significant role," Ficci President Sidharth Birla said in a statement.

He said that the industry is looking at announcements in new Budget and Foreign Trade Policy to boost manufacturing and investment.

"We also hope that there will be supporting steps from the Reserve Bank on the monetary policy side," Birla added.

Sharing similar views on on the IIP data, CII Director General Chandrajit Banerjee said that the negative growth of industrial production is "extremely disappointing".

"What is a matter of major concern is the low consumption and investment demand which is contributing negative growth of the manufacturing sector," Banerjee said.

He said that the negative growth of consumer durables reinforces that the sector continues to be stymied by the high interest rates prevailing in the economy.

"The weak industrial scenario should propel the new government to send out strong signals that it is committed to growth," he said, adding that top priority should be given to reviving investor sentiment by ensuring that cleared projects in the manufacturing and infrastructure sector take off on the ground.

Showing no signs of recovery, factory production remained in negative territory for the second month in a row, contracting 0.5 per cent in March due to

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