Industrial Growth will remain robust in 2007-08

Allaying apprehensions of a slowdown in the face of inflationary expectations and high interest rates, the government has said industrial growth will remain robust in 2007-08 on the back of impressive performance by the capital goods sector. ‘‘High rate of 14.1% growth of manufacturing in March and 12.3% in the whole of 2006-07 is expected to be sustained in this year as well,’’ department of industrial policy and promotion secretary, Ajay Dua said.

He said major contribution to manufacturing sector has come from a sharp increase in production of capital goods and intermediates in contrast to consumer goods. The capital goods sector registered a 17.7% growth while production of intermediate goods was up 11.7% in 2006-07. ‘‘High rate of growth of capital goods indicates that new production capacity is being added driven by consumer demand. Both the consumer demand and investment in capacity will continue to grow,’’ Dua said. “Increasingly liberal attitude to FDI in manufacturing and infrastructure is being adopted by the government. We are reviewing the ceilings on FDI in various sectors every year and reducing the number of clearances required,” he added.

In 2006-07, FDI inflows have witnessed an increase of 284% to $15.7 billion from $5.5 billion.“This year, we are expecting FDI of $25 billion in equity and $5 billion of earnings reinvested by existing companies,” he said.

The Index of Industrial Production (IIP) compares the growth in the general level of industrial activity in the economy with reference to a comparable base year. In order to capture the structural changes in the industrial sector, the base year of the all-India IIP which was commenced in India in 1937 was revised in 1946, 1951, 1956, 1960, 1970, 1980-81 and 1993-94. The current series of all-India IIP (base 1993-94) was released in May 1998. It covers the Mining, Manufacturing and Electricity sectors with weights of 10.47%, 79.36% and 10.17% respectively.

The Quick Estimates of IIP are compiled on the basis of data furnished by the source agencies located in various Ministries/Departments/Subordinate Offices of the Government of India. The index is released within six weeks from the reference month and are subsequently revised in the next and the third month based upon the revised production data furnished by the source agencies. For wide accessibility by the users, the copies of Press Release on Quick Estimates of IIP released through the Press Information Bureau are also put on the website of the Ministry of Statistics & Implementation (http://www.nic.in/stat) on the day of release.

• An overview of revision of Base Year of All-India Index of Industrial Production (IIP)
• Comparison of weights by item group in the manufacuring sector
• India Economic Growth Probably Fastest in Three Years - Bloomberg