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ShareIndustrial output during March 2009, as gauged by the index of industrial production, declined by 2.3% on a year-on-year basis -- the biggest fall for that month since the compilation of the present series with base 1993-94 commenced way back in April 1994.
In March 2008 and March 2007, the spurt in the index was 5.5% and 14.8%, respectively.
With the performance also lacklustre in the preceding months, the annual average growth for 2008-09 was down sharply to a measly 2.4% from 8.5% in 2007-08 and 11.6% in 2006-07.
This incremental increase is the lowest ever in a decade and half, eclipsing even the dismal showing in 2001-02 when the jump was of the order of 2.7%.
Some comfort can be drawn from the fact that, though industry had fared dismally in March 2009 and during 2008-09, the five-yearly average growth stood at a respectable 7.8% between 2004-09, which is higher than the similar average for 1999-2004 -- 5.4% -- and on a par with the incremental rise between 1994-99.
Clearly, the industrial slowdown witnessed last year was severe in character. That it was also pervasive is reflected in the fact that as many as 15 industrial groupings out of the 17 at the two-digit level of classification recorded negative growth rates or reported a spurt of less than 5% during 2008-09.
In March 2009 itself, signs of recovery were far from discernible in that the output in only four industry groups topped 5% or more in relation to what it was a year ago, the rest -- that is 76% of the total -- was enmeshed in recession in varying degrees.
In terms of sectors, the picture was mixed in March 2009. While the heavyweight, manufacturing, reported a setback to the tune of 3.3% in its output, there was marginal improvement in mining at 0.4%, though it was a far cry from the growth rate of 5.7% in March 2008.
In electricity, however, the tempo quickened to 6.3% from the previous year's 3.7%.
For 2008-09 too, the pattern was broadly similar, with the incremental growth rate in 2008-09 lagging behind that in 2007-08.
On a long-term basis, in stead of a sustained high order of rise, all the three sectors exhibited a two-way movement, ranging from a low of 1% in 2005-06 and a high of 5.4% in 2006-07 in the case of mining and from 2.8% in 2008-09 to 7.2% in 2006-07 in power generation.
However, the oscillations in the crucial manufacturing segment are the most pronounced, peaking to 12.5% in 2006-07 and slowing down to a meagre 2.3% in 2008-09.
The effect of these gyrations in the incremental growth rates in manufacturing is profound on the overall index of industrial production, in view of its large weight in this index. The weak growth signals emitted by industry in March 2009 and for the year ending that month are largely the result of an under-performing manufacturing sector.
The use-based classification of the index better reflects the underlying trends. All the four class of industries --- basic goods, capital goods, intermediate goods and consumer goods --- have shown a lower rate of increase in March 2008 vis-à-vis a yea ago.
But the performance was the worst in respect of capital goods where there was an absolute fall of 8.2% in production during this month while, in March 2008, the increase was a robust 20.3%.
In regard to intermediate goods, growth fell in to a negative zone in the latest month in contrast to a spurt of 4.9% last year, while in basic goods, the tempo slackened to 1.4% from 3.3%.
In consumer goods, a contrarian picture was visible. While there was a strong recovery in March 2009 in the case of durables segment, with the rate of growth accelerating to 8.3% from (-)2%, the output in non-durables was down by 3.6% in the latest month as against a jump of 1.9%.
In overall terms, the consumer goods had fared rather poorly in March of both 2008 and 2009, with only minisucle growth rates in these months.
For the fiscal year, 2008-09, as a whole, the use-based classification indicates that, production growth in basic goods has slowed down to 2.5% from 7%, in intermediate goods to (-)2.8% from 9% and in consumer goods to 4.4% from 6.1%.
In respect of capital goods too, there was a setback in the last fiscal but with a difference. The growth was handsome at 7%; this is more so, because in 2007-08 too, this sector had witnessed a robust spurt of 18%, so that, after making allowance for the high base effect, it appears the capital goods sector had acquitted itself creditable during the year ending March 2009.
