IIP growth disappointing, will improve soon: FM
"IIP is disappointing… I hope from the next couple of months it will start improving," Mukherjee told reporters here.
Factory output growth, as measured by the Index of Industrial Production (IIP), fell sharply to 1.8 per cent in December 2011, from 8.1 per cent a year ago, mainly on account of contraction in mining, capital goods and poor growth in manufacturing sector.
Expressing similar opinion, Prime Minister`s Economic Advisory Council Chairman C Rangarajan said that the numbers are disappointing and added that investment sentiment would revive in the next three months.
"There are indications of revival in factory output in January-March quarter as mining sector would show improvement as coal output is expected to rise," Rangarajan said.
He said the GDP growth for the current fiscal is likely to be "a shade better" than 6.9 per cent estimated by the Central Statistical Organisation (CSO). He said the growth for the next fiscal (2012-13) is likely to be around 7.5 per cent.
Output of the manufacturing sector, which constitutes over 75 per cent of the index, rose at a lower rate of 1.8 per cent in December, compared to a growth of 8.7 per cent in the same month of 2010.
Besides, capital goods sector witnessed a contraction of 16.5 per cent, against a growth of 20.2 per cent in the same month in 2010. Mining output too contracted by 3.7 per cent in December, against 5.9 per cent growth in the year ago period.