RBI may go slow on monetary policy tightening
NEW DELHI: Industrial growth has almost halved to 4.4 per cent in September against 8.2 per cent a year ago, pulled down by slow-down across segments.
However, the industrial growth in the first half of this fiscal, as measured by the Index of Industrial Production (IIP), stood at 10.2 per cent against 6.3 per cent a year ago. The higher growth in the first half of this fiscal is because of robust prod uction figures during initial months.
With the growth coming down heavily in the month of September along with declining inflation numbers, the RBI is likely to pause tightening of its monetary policy, indications of which were given by it in its latest review on November 2.
Manufacturing sector, which comprises almost 80 per cent of IIP, grew at a slower rate of 4.5 per cent in September against 8.3 per cent a year ago and electricity generation expanded by just 1.7 per cent against 7.5 per cent. Mining output rose 5.2 per cent (7.4 per cent).
Besides, the industrial growth figure for August was revised upwards to 6.91 per cent from 5.6 per cent estimated earlier. This has been partly due to the fact that industrial data has been updated to adjust the new series of wholesale price index, which takes 2004-05 as the base year against 1993-94 used earlier.
The compliant by RBI that industrial data is too volatile is substantiated by the behaviour of capital goods sector. In contrast to a whopping growth witnessed of late, capital goods production declined by 4.2 per cent in September. — PTI
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