Capital goods sector vibrant; investments to drive economy: FM

Capital goods sector vibrant; investments to drive economy: FM

New Delhi: India’s capital goods sector has retained its vibrant character, although growth of industrial production slipped in September due to muffled demand for consumer durables, Finance Minister P Chidambaram said on Monday.

The Index of Industrial Production for September grew at nearly half the rate (6.4%) than it did a year ago, as manufacturing sector growth sagged due to a 7.6% decline in consumer durables output during the month.

The recent slowdown in the economy is on account of slackening of consumer durables sector.

But the capital goods industry retains its vibrancy, Chidambaram said inaugurating the annual Economic Editors’ Conference here.

Capital goods sector - that covers factories, machinery and tools used to produce finished goods - grew by a healthy 18.6% in September as compared to 9.5% in the year-ago period, as per official data released earlier on Monday.

The output of the capital goods sector during the first half of the current fiscal improved to 19.6% from 17.5% a year ago.

“Industry has been the driver of our economic growth... and external sector has remained robust," he said, indicating economic growth will continue to be investment-driven, with the rate of investment growing to over 35% this year from 22.9% in 2001-02.