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Plan panel disappointed over June IIP numbers

Planning Commission on Thursday expressed disappointment over decline in industrial output by 1.8 per cent in June, while hoping the steps announced by finance minister P Chidambaram would help in boosting growth.

‘The industrial number has been disappointing for the first few months (of the fiscal),’ Commission's deputy chairman Montek Singh Ahluwalia said.

He, however, said initiatives announced by Chidambaram to boost investment sentiments last week would help in turn around of the economy.

‘Finance Minister has made a very good statement about the steps government will take to turn around the economic growth’, he added.

The industrial production contracted by 1.8 per cent in June mainly due to poor showing by manufacturing and capital goods sectors, reflecting persistent slowdown in the economy,.

Industrial output in the April-June quarter too declined by 0.1 per cent this fiscal.

Growth in factory output, as measured by the index of industrial production (IIP), was 9.5 per cent in June, and 6.9 per cent in April-June quarter of 2011-12.

Ahluwalia said steps which the government is planning to initiate to boost the economy would start showing results only around second half of the fiscal.

‘Only around September or October the judgement as to whether the steps have had the effect that is intended (could be seen),’ he added.

He further said the Planning Commission was in the process of finalising the ‘Economic Outlook’ section of the 12th Five Year Plan (2012-17).

‘I have said GDP growth will be 6-6.5 per cent. We take a final look at it and you will know our assessment probably by September.  We will give the required estimate by early September,’ Ahluwalia added.
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