Mumbai: Industrial production would fall from 5.1% to 4.8% this fiscal due to a dip in agricultural production, according to economic think-tank CMIE.
“We have revised our forecast for growth in industrial production in 2009-10 from 5.1% earlier to 4.8% in light of the failure of the monsoon,” Centre for Monitoring Indian Economy (CMIE) said in its monthly report.
The fall in agriculture production has a direct bearing on the growth in GDP in 2009-10. Its indirect impact on the growth is also significant.
CMIE further said that it has dropped its forecast for sugar production during 2009-10 due to an expected fall of 8% in sugarcane.
Similarly, the institute lowered its edible oil production forecast.
“While the industrial sector will face agro raw material supply problems in 2009-10, it will see a substantial increase in capacities,” CMIE said.
These capacities are mostly in non-agro industries, CMIE said.
Cement capacities are expected to increase by 27% during the year, those for aluminium by 25%, commercial vehicles by 50%, cars 25% and two-wheelers 18%, it pointed out.
“These capacity additions are expected to accelerate the growth in industrial production... therefore we expect industrial production to grow by 4.8% this fiscal compared to 2.4% growth registered in 2008-09.”