8.8% IIP growth is encouraging: Pranab Mukherjee

Terming the 8.8% industrial growth recorded in June as "encouraging", Finance Minister Pranab Mukherjee Friday said if the trend continues, it will boost economic growth.

"It is encouraging. If this trend continues, it will give a boost to growth," Mukherjee said.

He was commenting on the industrial growth figures for June, which showed a moderate recovery to 8.8% on the back of the strong performance of the manufacturing sector and better output of capital goods.

Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 7.4% in June last year, as per government data released .

Output of the manufacturing sector, which constitutes over 75% of the index, grew by 10% in June, 2011, compared to 7.9% in the same month last year.

Offtake of capital goods jumped by 37.7% in June, 2011, as against a moderate increase of 3.7% during the corresponding month last fiscal.

Similarly, electricity production also improved, witnessing a growth of 7.9% during the month under review, as compared to a growth of 3.5% in June, 2010.

Commenting on the latest numbers, Planning Commission Deputy Chairman Montek Singh Ahluwalia said, "I am glad that the latest figures show improvement. I think it is broadly along the lines that we have been talking about for the current year."

Ahluwalia said economic growth this fiscal would be in the range of 8-8.3%.

"I remain of the view that GDP growth in the current year (2011-12) could vary anywhere between 8 and 8.3%, which is roughly consistent with the spot forecast of the Prime Minister's Economic Advisory Council," Ahluwalia said.

Meanwhile, the industrial growth number for May this year has been revised upward to 5.9% from the provisional estimate of 5.6%.

During the first quarter (April-June) this fiscal, IIP growth stood at 6.8%, as against 9.6% in the corresponding three-month period last year.