IIP nos. discouraging, may impact growth:Pranab

Murshidabad (West Bengal): Finance Minister Pranab Mukherjee on Friday termed industrial production slumping to a two-year low of 1.9 per cent in September as "discouraging" and said it may have an impact on overall economic growth.

"The IIP figure for the month of September shows that it has come down from 6.1 per cent to 1.9 per cent. This is discouraging," Mukherjee told reporters after the inauguration of SBI`s 1011th branch at Sammatinagar here.

Industrial production as measured by the Index of Industrial Production (IIP) slumped to a two-year low of 1.9 per cent against 6.1 per cent in the corresponding month last year, mainly due to poor performance by mining and manufacturing sectors.

Attributing the decline to the impact of global slowdown, Mukherjee said, "There is lack of demand in the US and Europe and India`s exports have slowed down due to this. The phenomenon may adversely affect the overall economic activity and I am awaiting the second quarter GDP growth forecast," he said.

The second quarter GDP numbers are scheduled to be released on November 30. The government has lowered the economic growth projection for the current fiscal by a percentage point to 8 per cent.

Expressing satisfaction over some drop in food inflation, Mukherjee hoped inflation would moderate from November. "From November-December onwards, I hope the inflationary pressure will moderate and growth will take place," as the RBI has indicated that it may not further increase interest rate in its December review of monetary policy.

Earlier, at the branch opening function, he said that the government was confident that banks would meet the target of financial inclusion.

The government plans to cover 73,000 villages unbanked villages under the financial inclusion programme this fiscal. "The SBI has already completed 80 per cent of their target till now," Mukherjee said.