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India: Industrial production to fall to 4.8%

Source: PTI
July 17, 2009 10:14 IST
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Industrial production in the current fiscal would fall from 5.1 per cent to 4.8 per cent due to a dip in agricultural production, according to an economic think-tank.

"We have revised our forecast for growth in industrial production in 2009-10 from 5.1 per cent earlier to 4.8 per cent in the light of the failure of the monsoon," Centre for Monitoring Indian Economy, said in its monthly report.

The fall in agriculture production has a direct bearing on the growth in GDP in 2009-10. Its indirect impact on the growth is also significant.

CMIE further said that it has dropped its forecast for sugar production during 2009-10 due to an expected fall ofeight per cent in sugarcane.

Similarly, because of the expected fall in oilseeds, CMIE dropped its forecast for production of edible oil.

"While the industrial sector will face agro raw material supply problems in 2009-10, it will see a substantial increase in capacities," CMIE said. These capacities are mostly in non-agro industries, CMIE said.

Cement capacities are expected to increase by 27 per cent during the year, those for aluminium by 25 per cent, commercial vehicles by 50 per cent, cars 25 per cent and two-wheelers 18 per cent, CMIE said.

"These capacity additions are expected to accelerate the growth in industrial production...therefore we expect industrial production to grow by 4.8 per cent this fiscal compared to 2.4 per cent growth registered in 2008-09.

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