Mumbai: Industrial production in the country rose by 7.1 per cent in July 2007, sharply down from the 9.8 per cent growth recorded in June and 12.4 per cent in the same period last fiscal.

For April-July period, the output had gone up by 9.6 per cent against 10.6 per cent the previous fiscal, as per quick estimates released by the government.

Manufacturing output grew by only 7.2 per cent (as against 14.3 per cent in July 2006) while electricity and mining and quarrying sectors registered a growth of 7.5 and 4.9 per cent, respectively.

In the first four months of the current fiscal, these sectors witnessed a growth of 10.3 per cent, 8.1 per cent and 3.1 per cent respectively.

Industrial growth has slowed markedly each month since April when it rose to 13.6 per cent.

For the year to March 2007, industrial output rose 11.3 per cent compared to 8.2 per cent the previous year, helping the overall economy expand by a faster-than-expected 9.4 per cent.

Analysts attribute the July industrial output slowdown to moves by the Reserve Bank of India to tame inflation by raising benchmark interest rates nine times since late 2004 to put a dent in demand for credit and slow inflation.

Analysts said the industrial slowdown could lead the central bank to ease rules on lending, but that a rate cut was unlikely.

They expect the central bank to ease lending rules but have ruled out a rate cut. RBI will announce its next quarterly review of monetary policy on 31 October.


also see : General reports on Economy