Industrial growth to be in double digits in Feb: economists

Industrial growth to be in double digits in Feb: economists

New Delhi: Industrial growth is likely to continue its double-digit run for the sixth consecutive month in February in the range of 14-16%, despite a poor show by the six core segments, say economists a day before the release of the data.

Crisil principal economist D K Joshi said industrial growth is likely to be 14% in February, with consumer durables and capital goods as the key drivers.

Axis Bank economist Saugata Bhattacharya pegged the growth at 16%. He also believed that consumer durables would lead the industrial expansion, but said intermediate goods would be another prime driver.

Industrial production expanded 16.7% in January.

The February figures could be lower than January’s because of the dismal performance of the six core segments, which constitute over 25% of the index of industrial production (IIP), Joshi said.

Growth of the six key infrastructure sectors slowed to 4.5% in February against a robust 9.4% in January, prompting many economists to raise doubts over the sustainability of high economic growth rate.

Industrial growth in January was a tad slower than December’s 17.6%. It was for the second month in January that industrial growth was more than 15% and fifth month in a row that it was in double digits.

Consultant firm Deloitte India senior director Kumar Kandaswami said industrial recovery is not narrow, even though some sectors are showing lower growth.

Some sectors like leather products, vegetable fibre textile, including jute, and food products are still showing negative growth.

He said stimulus packages provided by the government to blunt the impact of the global financial meltdown was only partly responsible for the recovery as there are some fundamental rise in demand that have supported the growth.

After Indian economy came under the ripple effects of the collapse of the US financial services icon Lehman Brothers in the middle of September, 2008 and industrial growth started turning negative from October, the Government cut duties and stepped up public expenditure to revive the economy.

The economic growth slowed down to 6.7% during 2008-09, from 9% in the previous three years.

After the stimulus measures started yielding results, the Central Statistical Organisation has estimated the economy to grow by 7.2% during 2009-10.

This fiscal, Prime Minister Manmohan Singh has expected the economy to grow by 8.5% and nine per cent next fiscal.