Industrial production unlikely to achieve 9th Plan target

["Ulhas Joglekar" <joglekarulhas@xxxxxxxxxxx>]

Hindustantimes.com

March 30, 2002

Industrial production unlikely to achieve 9th Plan target

PTI
New Delhi , 30-03-2002

Both external and internal factors including the September 11 attacks in the
US and the Gujarat earthquake have impacted the growth rate of industrial
production which is unlikely to achieve the target of 8.2 per cent set for
the Ninth Five Year Plan (1997-2002).

"The year 2001 is marked by major exogenous and episodic events like
devastating earthquake in Gujarat on January 26, terrorist attack in the US
and attack on Indian Parliament on December 13. These events have had pull
and push effects on industrial activities and investment sentiments," the
latest annual report of the Department of Industrial Policy and Promotion
for 2001-02 said.

"The momentum in the growth rate in industrial production has come down to
6.1 per cent in 1996-97, 6.7 per cent in 1997-98, 4.1 per cent in 1998-99,
6.7 per cent in 1999-2000 and five per cent in 2000-01. These growth rates
are lower than the said target," the report said.

Overall industrial growth during the period April- December 2001-02 has been
pegged at 2.3 per cent which is less than half the rate of 5.8 per cent
recorded in the same period last year.

Though three major sectors namely mining, manufacturing and electricity have
registered positive growth rates during the first nine months of the current
fiscal, the growth rates have been lower than that achieved in the
corresponding period of the previous year.

Mining, manufacturing and electricity have registered growth rates of 1.1,
2.4 and 2.7 per cent respectively during April-December 2001-02 as against
4.4, six and 4.8 per cent registered during the corresponding period last
year, it added.

"The capital goods sector, which is one of the key indicators of investment,
has been worst hit by the slowdown, as growth rate during April-December
2001 has been a negative 4.8 per cent as against three per cent achieved
during the corresponding period of the previous year," the report said.

Basic goods, intermediate goods and consumer goods sectors have also
registered low growth rates of 2.2, two and five per cent, it said adding
that consumer durables, however, bucked the trend posting a double digit
growth of 12.5 per cent even though it is lower than the earlier growth of
17.8 per cent posted last year.

While industrial groups such as beverages, tobacco and related products,
leather, transport equipment, wool and silk, machinery and equipment posted
positive growth rate, other sectors such as food products, cotton textiles,
jute and metal products have shown negative growth rate during April-
December 2001.

However, despite the slowdown, the report said that there were some
indicators of a recovery in specific industrial sector.

"The manufacturing sector's relatively higher growth rate vis-a-vis overall
industrial sector growth rate reflects the former's strength, dynamism and
importance," it said adding that foreign demand for India's manufactured
goods have also been rising with manufactured goods accounting for 79.4 per
cent of the country's total exports.

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