Factory output dips 0.6% in Dec; dampens recovery process

New Delhi, Feb 12 (PTI)Industrial output contracted by 0.6 per cent in December, the second consecutive month of decline, mainly due to muted activities in manufacturing and mining sectors -- dampening the efforts for economic recovery. The factory output data, released by Central Statistical Organisation (CSO), follows a disagreement between this office and the Finance Ministry over the current fiscal economic growth estimate. It is also in sharp contrast to a growth of 2.7 per cent in the Index of Industrial Production registered during December, 2011. For the nine-month period between April and December of current fiscal, the industrial production grew at a meagre 0.7 per cent, as against a 3.7 per cent growth in the year-ago period, the CSO said. The CSO in its advance estimates last week pegged economic growth in 2012-13 at 5 per cent, as against the government projections of 5.7-5.9 per cent. Taking a contrary view to the CSO's estimates of economic growth projections, Finance Minister P Chidambaram had said, "There are signs of upturn and that will take us back to high growth path...we believe growth will be closer to 5.5 per cent rather than CSO's estimate of 5 per cent". The December IIP data showed poor performance of mining and manufacturing sectors and decline in production of capital, consumer and intermediate goods. "The continued fall in intermediate and capital goods production indicates that the revival is a distant dream," industry chamber Assocham said while reacting to the IIP data. FICCI President Naina Lal Kidwai said, the data has "dimmed hope" for a recovery in manufacturing in the near future and it is a cause for serious concern. (MORE) PTI KKS NKD BJ TVS