Industrial Production to Grow by 7.4% in FY 13: CMIE

Monday, 20 February 2012, 15:39 IST
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Mumbai: India's industrial production is expected to grow by 7.4% in FY13 as against the forecast of 5.1% for the current fiscal, Center for Monitoring Indian Economy (CMIE) said in its monthly review. Industrial production growth was 8.2% in 2010-11. The manufacturing sector is expected to witness a healthy growth of 6.5% in FY13, against forecast of 4.9% in FY12, CMIE said. This growth would be driven by over 10% rise in production of motor vehicles and other transport equipment, machinery, basic metals and wearing apparels. Rising corporate salaries, increase in rural income, softening of interest rates, improvement in availability of finance, new models and expansion of dealers network could boost passenger cars production by 13.1% in FY13. Production of MUVs, two-wheelers and three-wheelers is also expected to grow by around 10%. This will lead to higher demand and production in auto ancillary category. Huge capacity additions in the industrial and infrastructural construction segment and increase in production of automobiles and machinery is also expected to generate higher demand for basic metals in FY13, CMIE said. The mining industry, which saw a stagnation in FY12, is expected to grow by a healthy 5.6% next year. CMIE expects that electricity industry will continue to be a growth driver, clocking a double-digit rise in generation in FY13. The growth in electricity generation will accelerate to 13.2% in FY13 from 8.3% in FY12. Thermal power generation, which accounts for 80-85% of power generated in India, is expected to grow by a smart 14.3% owing to huge capacity additions and a likely improvement in availability of coal. Nuclear power generation too is expected to grow by 19%, while hydel power generation is expected to grow by 6.5%.Coal production may grow by 8.5% in FY13 after two years of stagnation. Coal producers will be able to raise the output following the scrapping of go/no go classification of coal blocks and fresh capacity addition of 24 million tons. Crude oil output is also expected to grow by a healthy 6.1% in FY13, as ONGC and Cairn India start production from new oil fields. Natural gas production is expected to grow by 5.3%, after falling by 7.9% in FY12. Coal, crude oil and natural gas account for 70% of the output of mined products. A likely improvement in production of these is expected to push up total output of mined products by 5.6% in FY'13, CMIE said.
Source: PTI