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Industrial output slows down, but experts not worried news
13 January 2011

India's industrial production growth fell to 2.7 per cent year-on-year in November, the slowest in 18 months and down from over 11.3 per cent growth in the previous month, according to data released on Wednesday.

This adds to the worries of the government's macro-economic managers, who are already beleaguered by soaring food inflation. They are grappling for options to sustain growth while keeping prices under check.

''We shall have to look into (the fall in factory output growth) and take corrective measures so that IIP numbers revive in the remaining four months,'' finance minister Pranab Mukherjee said in New Delhi.

The runaway prices and the sharp drop in factory output growth has upset the government's plans of implementing a carefully calibrated exit plan of the fiscal stimulus package in this year's budget.

Originally, the government had planned a two percentage point hike from 10 to 12 per cent in central excise duty.

''The plan was to fully withdraw the stimulus when the recovery in private demand - both consumption and investment - is sufficiently robust. While these have been achieved, high prices are a key concern. This may force the government to push back the planned increase in excise duty,'' an official said.

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Industrial output slows down, but experts not worried