INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

INDUSTRIAL OUTPUT UP 9.7%

  The Indian economy is on a roll. Manufacturing output turned in a vigorous growth of 11.1% during August, bringing industrial growth for the first five months of the current fiscal to 10.6%.

   Triggered by a whopping growth of over 20% in the consumer durable sector during August (13% last year) and an 11.1% growth in the manufacturing space (8.5% last year), India's industrial output shot up 9.7% in August. The growth recorded in the same month last fiscal stood at 7.6%. All these growth rates are in relation to the corresponding period a year ago.

   The index of industrial production (IIP) is a weighted average of mining, manufacturing and electricity output. Virtual stagnation in mining (-0.1%) and disappointing growth in power generation (3.7%) held back the growth of the index in August at 9.7%.

   The consumer goods industry grew 14.6% in August (9.3% last year) while the consumer nondurables sector jumped 12.6% (8% last year).

   Also, in the five-month period of April-August, the consumer durable industry recorded a growth of 16.6% and consumer non-durables 9.5%, bringing the consumer goods sector's growth to 11.3% for this period. Mining sector growth was better at 3.1% in April-August 2006 against 1.6% in the first five months of 2005. Electricity posted a growth of 5.7% so far this fiscal, slightly lower than 6% in April-August 2005.

   Suggesting that growth continues to be driven by investment, the capital goods sector turned in a growth of 14.7% in August. The growth rate of this vital segment over April-August ‘06 was 18.6%.