April IIP grows at 6.3% as per new series

India's industrial production grew at 4.4% in April versus 7.3% in March as per old series. As per the new series, the IIP grew at 6.3% in April. The Central Statistical Organisation (CSO) has launched a new series of IIP today. The new series has 45% more items and has 2004-05 as its base year. The old series had 1993-94 as the base year. A CNBC-TV18 poll had estimated 5.1% growth in April industrial output.

Also read: March IIP at 7.3% vs 3.7% (MoM) The poor performance of the manufacturing and mining sectors pulled down the overall growth of industry as per the old series with a base year of 1993-94 from 16.6% in April last year. Meanwhile, factory output in March was revised upward to 7.8% from the provisional estimate of 7.3% released last month. As per the old series, growth in manufacturing, which constitutes about 80 per cent of the index weight, nosedived to 4.4% in April from a high of 18% in the same month last year. Mining also grew by a meagre 2.1% during the month under review as against 12% in April, 2010. Growth in electricity production also dipped to 6.4% in the month under review from 6.9% in the same period of the previous year. Another area of concern was the low offtake of capital goods, whose production growth was just 2.5% in April, 2011, compared to 64.1% in April last year. Overall, consumer goods also saw the growth rate slow to 5.9% in April from 11.9% in the same month last year, as per old series. Meanwhile, as per the new series, manufacturing growth in April stood at 6.9 %, while mining and electricity production was up 2.2% and 6.4%, respectively. Capital goods registered a growth of 14.5% and overall consumer goods were up by 2.9% in April as per the series with a base year of 2004-05. Production trends for 100 new items, including ice cream, fruit juice and mobile phones, has been included for measuring the pace of industrial production in the new index series, which was recently approved by the government. The new items in the IIP would also include computer stationary, newspapers, chemicals like ammonia, ammonia sulphate, electrical products like solder power systems, gems and jewellery and molasses. On the other hand, obsolete articles like typewriters, loud speakers and VCRs have been taken off to make the series representative of the present-day industrial production and demand scenario. The base year for the new series is 2004-05 as against 1993-94 for the old one. The new IIP series is expected to help policymakers and market participants forecast economic trends. The Department of Industrial Promotion and Policy (DIPP) and Central Statistical Organisation (CSO) jointly worked on the new index. Concerned over the falling industrial growth rate, Finance Minister Pranab Mukherjee said, "The IIP growth figures are disturbing. (We) need to wait for longer term IIP growth to see the trend." Ashutosh Datar Economist, IIFL betting on the new series says that while growth is decelerating, inflation remains unacceptably high. Therefore he is not expecting RBI