Indian Manufacturing Sector

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Drastic fall in industrial growth: Down at 2.7%

January 13, 2011 5:02:29 AM

Timsy Jaipuria | New Delhi

Is it indirect impact of inflation?

Even as the Government is struggling to control rising inflation, the drastic plunge in November industrial growth, which fell to 18-month low of 2.7 per cent on account of sharp fall in manufacturing, came as a big blow. The industrial growth was 11.3 per cent in October 2010 and 11.3 per cent in November 2009. Economists say the industrial growth in December may remain in the ‘low single digit.’



While analysts suggest that a rise in inflation and a decline in industrial growth could have an adverse impact on the economy, the Government too realises this twin danger.



“If IIP goes down and inflation goes up, it will have an adverse impact, but I am not coming to any premature conclusion,” said Finance Minister Pranab Mukherjee.