Capital goods in negative zone: ASSOCHAM
New Delhi, Mar 12 : While the Industrial growth for January is being seen as better than expected, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), one of the apex trade associations of India, on Tuesday said its reading is that the Indian industry is still not out of the woods.
"The capital goods sector, a key reflection of an investment scenario, is still in the negative zone though the extent of damage seems to have been contained at minus 1.8 per cent against minus 2.7 per cent in January last fiscal," said ASSOCHAM.
Consumer durables are still in trouble with a negative trend prevailing indicating a link between high interest rates and the demand depression. Though here also, the damage seems to have been checked somewhat because the minus trend has improved from (-) 7.5 per cent in January, 2012 to (-) 0.9 in January this year, the chamber said.
As many as 11 out of the 22 industry groups have shown positive trend, but the concern is that at least half of the industrial sub-groups are still battling. Under these circumstances, it can only be said with some positive bias that the worst seems to have been over.
But the industry needs a lifeline in terms of demand regeneration which will have to come from the Reserve bank of India through policy interest rate cuts, said the ASSOCHAM.
"ASSOCHAM will urge the RBI (Reserve Bank of India) not to get too much influenced by the Consumer Price Index (CPI) released today as the high CPI is a function of high food prices which are not influenced by credit supply. On the other hand, several segments like the automobile - commercial vehicles, cars, are bleeding," chamber President Rajkumar Dhoot said.
The CPI numbers are not the core inflation which is on a downward trajectory in term of wholesale price index, he said.
India's industrial production for January 2013 rose by 2.4 percent from a year earlier, according to the Quick Estimates of Index of Industrial Production (IIP) with base 2004-05 on Tuesday.
The General Index for the month of January 2013 stands at 181.8, which is 2.4% higher as compared to the level in the month of January 2012. The cumulative growth for the period April-January 2012-13 over the corresponding period of the previous year stands at 1.0%.
The data have been released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation. IIP is compiled using data received from 16 source agencies.
The Indices of Industrial Production for the Mining, Manufacturing and Electricitysectors for the month of January 2013 stand at 134.0, 193.7 and 160.7 respectively, with the corresponding growth rates of (-) 2.9%, 2.7% and 6.4% as compared to January 2013. The cumulative growth in the three sectors during April-January 2012-13 over the corresponding period of 2011-12 has been (-) 1.9%, 0.9% and 4.7% respectively.
In terms of industries, 11 out of the 22 industry groups (as per2-digit NIC-2004) in the manufacturing sector have shown positive growth during the month of January 2013 as compared to the corresponding month of the previous year.
The industry group 'Electrical machinery and apparatus n.e.c.' has shown the highest positive growth of 46.7%, followed by 19.8% in 'Tobacco Products' and 18.1% in 'Wearing apparel; dressing and dyeing of fur'. On the other hand, the industry group 'Medical, precision & optical instruments, watches and clocks' has shown a negative growth of 24.5% followed by 22.8% in 'Publishing, printing and reproduction of recorded media' and 16.5% in 'Wood and products of wood and corkexcept furniture; articles of straw and planting materials'.
As per Use-based classification, the growth rates in January 2013 over January 2012 are 3.4% in Basic goods, (-) 1.8% in Capital goods and 2.0% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 0.9% and 5.3% respectively, with the overall growth in Consumer goods being 2.8%.
Some of the important items showing high positive growth during the current monthover the same month in previous year include 'Leather Garments' (73.0%), 'Antibioticsand its preparations' (18.8%), 'Vitamins' (100.7%), 'Carbon Steel' (25.3%), 'CR Sheets' (62.4%), 'Pressure Cooker' (29.5%) 'Air Conditioner (Room)' (31.6%), 'Conductor, Aluminium' (71.3%) and 'Cable, Rubber Insulated' (140.1%).
Some of the other important items showing high negative growth are: 'Block Board' [(-) 24.5%], 'Newspapers' [(-) 23.1%], 'Polythene Bags including Hdpe & Ldpe Bags' [(-) 44.9%] 'Grinding wheels' [(-) 34.8%], 'Boilers' [(-) 19.1%], 'Stampings & Forgings' [(-) 23.9%], 'Heat Exchangers [(-) 36.8%], 'Earth Moving Machinery' [(-) 22.3%], Plastic Machinery including moulding machinery' [(-) 27.5%], 'Commercial Vehicles' [(-) 17.9%] and 'Gems and Jewellery' [(-) 14.8%].