July Industry Output...

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[GOOD EXPECTATIONS: Labourers work inside a steel factory on the outskirts of Agartala. (Reuters) After a dismal performance in the previous two months, the industrial growth recovered to 7.1 per cent in July owing to resurgence in capital and consumer durable goods sectors. Even though industrial growth, as measured by the index of industrial production (IIP), moderated compared with 8.3 per cent a year ago, what was heartening for the economy was that the crucial capital goods production surged by a whopping 21.9 per cent from 12.3 per cent. The improved data is above the market expectations of around six per cent and may provide some respite to the government and RBI, struggling hard to check the double-digit inflation through tight monetary policy which hampers the growth process. &quot;It (industrial growth) is higher than expectations,&quot; said Axis Bank economist Saugata Bhattacharya. Consumer durable goods production, which had been showing a declining trend a few months back, also jumped by 11.2 per cent, against a negative 2.7 per cent growth a year ago. Click On Instant View &quot;As expected, consumption goods have shown strength, but the positive surprise was from capital goods,&quot; Yes Bank chief economist Shubhada Rao said. In the broader category, while the manufacturing, which contributes about 80 per cent to IIP, grew by 7.5 per cent in July, compared with 8.8 per cent a year ago, electricity generation was up by 4.5 per cent, against 7.5 per cent. Mining output growth, however, was quite higher at 5 per cent from 3.2 per cent a year ago. The industrial growth was low at 3.8 per cent in May and 5.4 per cent in June. In April, however, industrial growth stood at 7 per cent, more or less same as in July. Industrial growth turned out to be 5.7 per cent in the first four months of this fiscal, against 9.7 per cent a year ago. Industrial output for the month of July will play a crucial role for GDP numbers for the second quarter, but the improving trend should be sustained for the coming months accompanied by good growth in services and farm sectors as well. &quot;This is a welcome data, but we have to wait and watch how the figures turn out to be in the coming months,&quot; Bhattacharya said. However, Rao was more optimistic saying that industrial growth is likely to extend its strength from here on, albeit with some interim dips. Indian economy grew by 7.9 per cent in the first quarter of this fiscal. In terms of industries, as many as 10 out of 17 groups have shown positive growth in July, compared to the corresponding month of the previous year. The industry group beverages, tobacco and related products have shown robust growth of 28.6 per cent, followed by 18.7 per cent in transport equipment and parts and 16 per cent in machinery and equipment. On the other hand, the industry group wool, silk and man-made fibre textiles have shown a negative growth of 9.2 per cent, followed by 9.1 per cent in wood and wood product and 4.9 per cent in leather and fur products. (PTI)