New Delhi, Aug 9 (IBNS) Union Finance Minister P. Chidambaram on Thursday said that the Quick Estimates of IIP for the month of June, 2012 are disappointing.
The Finance Minister said that it is important to focus on the critical sectors, remove bottlenecks and give a fillip to production.
He was reacting to the quick estimates of IIP index for the month of June, 2012 which were releasedon Thursday.
Chidambaram further said that the production will revive if there are new investments in the demand creating industries.
In this regard, he also referred to his statement of August 6, wherein he said, “Supply side constraints upon manufacturing and exports must be removed in double quick time…. We intend to find practical solutions to the problems that impede higher production or output in the coal, mining, petroleum, power, road transport, railway and port sectors.”
Regarding the decline in estimates of IIP, Chidambaram said that it is due to decline in the manufacturing sector (-3.2% in June and -0.7% in the April-June quarter). He said that within the manufacturing sector, capital goods declined -27.9% in June and consumer non-durables declined -1.0% in June.
He said that the positives are electricity generation which has recorded 8.8% growth in June (6.4% for April-June quarter); textiles at 9.3% (7.8% for the quarter); basic goods at 4.1%(3.5% for the quarter); consumer goods at 3.5% (4.0% for the quarter); and mining and quarrying at 0.6% (-1.1% for the quarter).
"More coal was available. Consumer spending remains good," the Minister added.
India's industrial output based on the Index of Industrial Production (IIP) contracted for the third time in four months by 1.8 percent owing to a slump in manufacturing sector, according to the Quick Estimates of Index of Industrial Production and use-based Index for June, 2012 released on Thursday.
The Quick Estimates of Index of Industrial Production (IIP) with base 2004-05 for the month of June 2012 have been released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation.
The General Index for the month of June 2012 stands at 168.3, which is 1.8% lower as compared to the level in the month of June 2011. The cumulative growth for the period April-June 2012-13 stands at (-)0.1% over the corresponding period of the previous year.
Srikant Kumar Jena, Minister of State (Independent charge), Ministry of Statistics & Programme Implementation, announced the release of the monthly Quick Estimates of Index of Industrial Production (IIP) for June.
The three sectors that constitute the index are Mining, Manufacturing and Electricity. The monthly growth rates of these three sectors for the month are 0.6%, (-)3.2% and 8.8% respectively.
The Minister said as per “use-based” classification there have been negative growths in consumer non-durables (-1.0%) and capital goods (-27.9%) whereas positive growths have been achieved in basic goods (4.1%), intermediate goods (1.6%) and consumer durables (9.1%).
The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of June 2012 stand at 124.3, 178.1 and 157.0 respectively, with the corresponding growth rates of 0.6%, (-)3.2% and 8.8% as compared to June 2011. The cumulative growth in the three sectors during April-June 2012-13 over the corresponding period of 2011-12 has been (-) 1.1%, (-)0.7% and 6.4% respectively.
In terms of industries, fourteen (14) out of the twenty two (22) industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown non-negative growth during the month of June 2012 as compared to the corresponding month of the previous year.
The industry group ‘Radio, TV and Communication Equipment and Apparatus’ has shown the highest growth of 16.8%, followed by 15.7% in ‘Medical, precision & optical instruments, watches and clocks’ and 15.3% in ‘Publishing, printing & reproduction of recorded media’.
On the other hand, the industry group ‘Electric Machinery and apparatus n.e.c.’ has shown a negative growth of 56.0% followed by 5.7% in ‘Food products and beverages’ and 5.4% in ‘Tobacco products’.
As per Use-based classification, the growth rates in June 2012 over June 2011 are 4.1% in Basic goods, (-) 27.9% in Capital goods and 1.6% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 9.1% and (-)1.0% respectively, with the overall growth in Consumer goods being 3.5%.
Some of the important items showing high negative growth during the current month over the same month in previous year include ‘Cable, Rubber Insulated’ [(-)82.0%], ‘Sugar’ [(-)66.1%], ‘Sponge Iron’ [(-)17.2%], ‘Fruit Pulp’ [(-)22.4%], ‘Three-Wheelers’ [(-)-29.4%], ‘Di Ammonium Phosphate’[(-)54.1%], ‘Cement Machinery’ [(-)40.0%] and ‘Colour TV Picture tubes’[(-)79.7%].
Some of the other important items showing high positive growth are: ‘Aerated Waters & Soft Drinks’ (58.3%), ‘Biaxially Oriented Polypropylene (BOPP)Film’ (35.1%), ‘Petroleum Coke’ (70.8%) and ‘Woollen Carpets’ (61.5%).
Along with the Q.E. of IIP for the month of June 2012, the indices for May 2012 have undergone the first revision and those for March 2012 have undergone the final revision in the light of the updated data received from the source agencies.
It may be noted that these revised indices (first revision) in respect of May 2012 shall undergo final (second) revision along with the release of IIP for the month of August 2012.