Industrial growth bounces back to 5.9% in November 2011

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Led by a recovery in manufacturing output, industrial production grew by 5.9 per cent in November, 2011, after witnessing a contraction in the previous month, a development that may reverse the negative sentiment amid an economic slowdown.

Factory output, as measured by the Index of Industrial Production (IIP), grew by 6.4 per cent in November, 2010, as per data released by the government here on Thursday.

Meanwhile, the IIP figure for October, 2011, has been revised. The latest data indicates a 4.74 per cent contraction in industrial output during the month, as against the provisional estimate of a 5.1 per cent decline in production.

Output of the manufacturing sector, which constitutes over 75 per cent of the index, went up by 6.6 per cent in November, compared to a growth of 6.5 per cent in the same month of 2010.

Power generation grew by robust 14.6 per cent in November, 2011, compared to 4.6 per cent in the same month of 2010

Production of consumer goods also witnessed a 13.1 per cent upswing during the month under review, as against growth of a mere 0.7 per cent in the corresponding month of 2010.

Furthermore, consumer durables production increased by 11.2 per cent, compared to a growth of 7.2 per cent in November, 2010.

During the month under review, output of consumer non-durables also went up by 14.8 per cent. The segment had declined by 4.4 per cent in November, 2010.

However, mining output declined by 4.4 per cent in November this fiscal, as against a growth of 6.9 per cent in the corresponding month a year ago.

Production of capital goods also fell by 4.6 per cent in the month under review. The segment had grown by 25.7 per cent in the corresponding month of 2010.

Meanwhile, basic goods production witnessed 6.3 per cent growth in November, 2011, as against growth of 5.7 per cent in the same month of 2010.

Production of intermediate goods also rose marginally by 0.2 per cent during the month, compared to growth of 4.3 per cent in the year-ago period.

The resurgent industrial production numbers are likely to boost the sentiment in the economy and may also help the RBI go for rate cuts in the near future.

India's economy grew by 6.9 per cent in July-September, 2011, the slowest rate of expansion in nine quarters.

India Inc had attributed the slowdown to rising interest rates, which have led to an increase in the cost of borrowing, thus hindering fresh investment.

The Reserve Bank has hiked interest rates 13 times since March, 2010, to tame inflation. Headline inflation has been above the 9 per cent-mark since December last year.