Industrial growth target may be revisited: PMEAC chief   

      New Delhi, Sep 12 (PTI) Industrial growth projections
 for the current fiscal will have to be revisited in the wake
 of "disappointing" pace of expansion in the factory output,
 which plunged in July to 3.3 per cent, Chairman of Prime
 Minister's Economic Advisory Council C Rangarajan said on
 Monday.
        "As regards the estimate of industrial production for
 the year as a whole, we will have to revisit the area after
 one or two months," PMEAC Chairman said, after release of
 India's Index of Industrial Production (IIP).
        The dismal factory output growth was on the back of a
 poor performance by manufacturing, mining and capital goods
 segments. In fact, the capital goods sector saw a big decline
 of 15.2 per cent,reflecting eroding investor confidence.
        Industrial growth was 9.9 per cent in the corresponding
 month of 2010 and 8.8 per cent in June this year. The data is
 disappointing on the two scales, year-on-year and the
 sequential basis.
        For the cumulative April-July, 2011-12 as well, the drop
 in growth is sharp at 5.8 per cent as against 9.7 per cent a
 year ago.
        "It is a disappointing number. One had expected that
 industrial production will be slightly higher than this,"
 Rangarajan said.
        In its Economic Outlook, the PMEAC had projected
 industry to grow by 7.1 per cent in the current fiscal. The
 Indian government, in February had pegged it at 8.6 per cent.
 The IIP had grown by 7.8 per cent in 2010-11.
        Rangarajan, however, hoped that the industry would put
 up a better show in the second half of the year.
        "At the present moment perhaps the numbers are not
 encouraging... but if the industrial production does better in
 the second half, then the overall growth rate may be higher. I
 will say that we will have to revisit the area after one or
 two months," he said.
        Asked if IIP slowdown may prompt a re-think on the GDP
 target as well, he said: "While industrial production does not
 appear to be encouraging and maybe lower than what we had
 originally expected, agriculture may do better.
        "And the services sector may still do well and exports
 are doing well. Therefore, the revision in terms of the GDP
 growth rate will have to taken in the context of the
 developments in agriculture, industry and services,"
 Rangarajan said.
        The Finance Ministry may go in for a formal revision in
 the overall growth projections for the year in the backdrop of
 the recent global developments and rising cost of borrowing
 and raw material.
        The PMEAC has projected GDP to grow by 8.2 per cent this
 fiscal. PTI PPB
 AGL