India’s economic woes worsen, industrial growth dips to 2.7%

Thursday, 13 January 2011 00:01 -     - {{hitsCtrl.values.hits}}

New Delhi, Jan 12 (IANS) India’s industrial growth plunged to 2.7 percent in November from 11.3 percent in October, worsening the economic woes for the government struggling to find ways to control the soaring prices of essential commodities.

The index of industrial production (IIP) fell to 2.7 percent in November, the slowest growth since May 2009, according to official data released Wednesday.

‘Inflation is going up and industrial output going down - it will have an adverse impact but I am not coming to any premature conclusion,’ Finance Minister Pranab Mukherjee told reporters while reacting to the 8.6 percent slump in industrial output growth.

He said the sharp drop in industrial output was partly because of the base effect.

‘Last year in the month of November there was a sudden jacking up, so base effect is also there, but that is no consolation. We shall have to look into it and take corrective measures,’ the finance minister said, adding that the situation was likely to improve in the coming months.

‘In the next four months the situation should improve. Let’s hope so,’ he said.

The IIP for October was revised upwards from 10.8 percent to 11.3 percent.

The sharpest fall during the month of November came in consumer non-durables, which showed a negative output of 6 percent compared to a growth of 36 percent in the like month in 2010.

Manufacturing, the biggest constituent in the IIP, grew at 2.3 percent against 12.3 percent in November 2009.

Slowing industrial production will put the government and the Reserve Bank of India in a fix when it comes to tackling inflation as hiking key interest rates was one of the foremost measures employed by the central bank last year.

However, Deputy Chairman of Planning Commission Montek Singh Ahluwalia said the November figure was an aberration and industrial output growth during the current financial year was likely to remain in double digits.

‘I don’t expect this to continue. The government has already taken a number of steps. I am very certain that what you see in December will get corrected in the coming months,’ Ahluwalia said, referring to inflation.

Ahluwalia said prices of essential commodities was likely to moderate next month as the government had taken a number of corrective measures.

‘Some of those prices are already coming down. In the month of February, we will definitely see a different situation on pricing front for these sensitive commodities,’ he told reporters here.

Annual food inflation surged to 18.32 percent for the week ended Dec 25, 2010, as high cost of onions spread its effect to other vegetables as well.

Industry forums have expressed concern over the sharp decline in industrial output data.

‘This should make the RBI more cautious about aggressive tightening at its forthcoming policy meet,’ Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), said in a statement.

‘Concerns on inflation should be tackled on the supply side given that it is being driven by a limited set of food items where bottlenecks in distribution are the root cause of rising prices,’ Banerjee added.

China posted 9. 2 per cent growth rate in 2009: Official body

BEIJING: China has posted posted 9.2 per cent growth rate in 2009, 1 per cent more than the previous calculations.

China’s gross domestic product (GDP) in 2009 has been modified up to 9.2 per cent from the previous 9.1 per cent, the National Bureau of Statistics (NBS) announced Tuesday.

After the revision, China’s GDP at current value was 34.09 trillion yuan in 2009, up by 39.6 billion yuan from the previous figure, the NBS said in a statement on its website.

The NBS gave no explanation for the revision, but a chart breaking down the output figures indicated all the additional gains came from the tertiary, or service, sector, Xinhua reported.

After the verification, the value added output of the tertiary sector was 14.80 trillion yuan, 39.6 billion yuan more than the figure announced by the NBS in July.

The value added output of the primary sector was 3.52 trillion yuan while that of the secondary sector was 15.76 trillion yuan, both unchanged from previous calculations.

This was the second revision of the 2009 GDP growth figure.

The Chinese government originally said the national economy expanded 8.7 per cent year on year in 2009.

Based on the current calculation, the primary sector contributed 10.3 per cent of China’s 2009 GDP, the secondary sector 46.3 per cent and the tertiary sector 43.4 per cent.

China vows to step up parliamentary cooperation with Maldives

China’s top legislator, Wu Bangguo, met with his Maldivian counterpart Abdulla Shahid in Beijing Monday and called for closer relations between the two nations and the two parliaments.

Wu, chairman of the Standing Committee of the National People’s Congress (NPC), China’s top legislature, said the growth of bilateral relations in recent years had yielded substantial benefits for the two peoples.

Wu said China valued ties with the Maldives and was willing to maintain friendly exchanges and cooperation at all levels in an effort to expand political mutual trust and economic and trade cooperation in fields such as fisheries, tourism, and infrastructure construction.

China would encourage Chinese companies to further participate in the Maldives’ national construction and more Chinese tourists to visit the country, Wu said.

Wu voiced his hope for stronger coordination between the two nations on international issues in order to build a relationship that would be a model for relations between big and small nations.

Wu suggested the two legislatures promote dialogue and exchanges of views among members on successful experiences of national construction so as to inject new vitality to the development of bilateral relations.

Shahid, speaker of the Maldivian People’s Majlis, said the Maldivian people treasured the friendship of the Chinese people, and the rapid growth of the Chinese economy offered inspiration to developing countries, including the Maldives.

Shahid pledged the Maldivian parliament would continue to play a constructive role in promoting bilateral relations.

Shahid is leading a Maldivian parliamentary delegation to China at the invitation of Wu. The delegation arrived in China on Jan. 8. It is Shahid’s first visit to China as the country’s chief legislator. Source:China Daily