Industry to grow at over 10% this fiscal: Pranab

Encouraged by the industrial production growth rate of 10.8 per cent in October, Finance Minister Pranab Mukherjee on Friday sounded confident that the trend would continue and the fiscal would end with double-digit growth rate.

"This (Industrial Production number) is quite encouraging. I hope this trend will continue and double digit growth in industry would be possible," Mukherjee said.

Expressing satisfaction over cumulative IIP growth rate of 10.3 per cent during April-October, the minister said, "the trend is encouraging, all the three important sectors -- industry, agriculture and services -- are evenly growing, and making the contribution to the GDP, which is a healthy sign."

The index of industrial production (IIP)  grew by 6.9 per cent during April-October last fiscal.

The industrial growth, which had slipped to 2.8 per cent in 2008-09 following global financial meltdown, rose to 10.4 per cent in 2009-10, mainly on account of stimulus measures provided by the government and the Reserve Bank of India.

In the current fiscal, the IIP recorded an increase of 15.08 per cent in July, However, it slipped to 6.91 per cent growth in August and 4.4 per cent in September.

The IIP growth in September, Mukherjee said, was an aberration, as in earlier months the industrial production index was quite satisfactory.

The industrial output in October, which registered double-digit growth after two months, rose by 10.8 per cent on back of healthy performance of sectors such as automobile, electronic goods and power.

This is in comparison to the  growth rate of 10.1 per cent in October last fiscal.

Industry could boom at 10%: Montek

The government on Friday exuded confidence that industrial output would be close to 10 per cent this financial year as it welcomed the return of double-digit growth in the sector during October.

"I hope that it (IIP growth rate) would be close to 10 per cent but it may not actually get to 10 per cent," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

After a gap of two months, the Index of Industrial Production (IIP) recorded a double digit growth of 10.8 per cent in October.

Having recorded an increase of 15.08 per cent in July, IIP slipped to 6.91 per cent in August and further to 4.4 per cent in September.

"We have to wait and see whether this (high IIP) growth is maintained in the remaining months of the year because this is the period last year when growth picked up.

"There could be base level effect so the growth rate could be lower compared to same months last year," Ahluwalia said.

As regards the economic growth during the current fiscal, he said, "the 8.5 per cent (GDP growth) would definitely be achieved, it could be little higher. But we are not giving precise forecast on that."

The economy during the first half of the current fiscal recorded an increase of 8.9 per cent, raising hopes that the fiscal might witness economic expansion of 9 per cent, up from 7.4 per cent in 2009-10.

Asked about the need to provide further stimulus to fuel growth momentum, he said, "This is not the occasion when stimulus (should be given) when economy is growing at 8.5 per cent."

"It is very difficult to say that you need stimulus. Of course, you need policies which retain this growth momentum."

Although economy is doing very well on the growth front, inflation is still high, Ahluwalia said, adding that the government will have to keep a vigil on it.

"Growth is doing very well. Things are improving on inflation, but in the present situation inflation is still high. We cannot relax vigil on inflation," he said.