Factory output as measured by the index of industrial production (IIP) grew at a slower rate of 2 per cent in April on a year-on-year basis compared to the revised growth of 3.4 per cent in March 2013. In April 2012, the IIP declined 1.3 per cent.
Among sectors, mining output declined 3 per cent in April, while manufacturing and electricity production grew 2.8 per cent and 0.7 per cent respectively.
From the demand side, capital goods output expanded at a tepid pace of 1 per cent in April compared to a contraction of 21.5 per cent in the year-ago period.
The IIP data indicates that there are no convincing signs signs of a broad-based recovery in the economy. Sharply lower growth of capital goods in April 2013 following two months of 9 per cent expansion reflects weakness in a number of sub-sectors of machinery and equipment, in line with the sluggish near-term outlook for investment activity, some experts feel.
Growth is likely to remain slow in coming months as it takes time for the reforms to kick in. Moreover, the reform momentum could slow. Finally, external weakness is likely to linger for a while still.
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