India's industrial output contracts by 5.1 per cent in October

New Delhi, Dec 13 (PTI) India's industrial output shrunk by 5.1 per cent in October after witnessing a sustained slowdown over the past few months, led by a steep fall in production of almost all sectors, particularly manufacturing, mining and capital goods. Factory output, as measured by the Index of Industrial Production (IIP), had grown by 11.3 per cent in October last year. As per data released by the government, industrial output grew by 3.5 per cent during the first seven months of the current 2011-12 fiscal (April-October), as against 8.7 per cent in the same period last year. Output of the manufacturing sector, which constitutes over 75 per cent of the index, declined by 6 per cent in October, compared to a growth of 12.3 per cent in the same month of 2010. In addition, mining output declined by 7.2 per cent in October this year, as against a growth of 6.1 per cent in October last year. Production of capital goods fell sharply by 25.5 per cent in the month under review. The segment had grown by 21.1 per cent in the corresponding month of 2010. Output of consumer goods also fell by 0.8 per cent during the month under review, as against a growth of 9.3 per cent in the corresponding month of 2010. In a similar fashion, basic goods production witnessed a 0.1 per cent decline in October this year, as against a growth of 9.8 per cent in the same month of 2010. Production of intermediate goods fell by 4.7 per cent during the month, compared to a growth of 9.7 per cent in the year-ago period. However, electricity production grew by 5.6 per cent during the month under review, as compared to 8.8 per cent growth in October, 2010. The decline in industrial production numbers, as per the latest data, suggests continued sluggishness in the economy, experts said. Last week, the government revised its growth projection for the Indian economy in 2011-12 downward to 7.5 per cent from the earlier forecast of around 9 per cent in the pre-Budget Survey of February 2011. 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 of India, the country's central 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. PTI