NEW DELHI: The global financial turmoil took a toll on India's industrial growth, which nosedived to 1.3 per cent in August from a high of 10.9 in the corresponding period last year, mainly on account of poor performance by the manufacturing sector.
Finance Minister P Chidambaram, however, expressed doubts over the Index of Industrial Production (IIP) numbers, saying it was not very reliable.
"The IIP numbers are not very satisfactory and at the same time they are not very reliable," he said, adding he had conveyed his concerns to the Industry Ministry couple of months ago.
"I think the IIP number has to be taken as just one input. We should look at many other number...exports, imports, FDI and capacity to raise ECB," he said when asked on the impact of slowdown of industrial growth figures on economy.
As per the latest IIP data for the month of August, manufacturing sector grew by a mere 1.1 per cent as against 10.7 per cent in the same period a year ago.
For the five month period (April-August 2008-09), the industrial production growth rate stood at 4.9 per cent, down from 10 per cent during the corresponding period last year.
Experts attributed the fall in industrial growth, as measured by IIP, to the tight monetary policies taken up in the past few months to combat rising inflation.
Commenting on the latest IIP figures, Yes Bank Chief Economist Shubhada Rao said: "The sharp slowdown is a concern and this is largely reflective of past monetary tightening."
She said the expectation was to have a six per cent IIP growth but it has come to a very low level.
"But still we will be able to have an IIP growth between 6-7 per cent for 2008-09 because of the present measures being taken up," she added.
