The fiscal 2008-09 began on somber note with industrial growth in April dropping to 7 per cent compared to 11.3 per cent in the same month a year ago, reflecting the impact of higher interest rates and rising input costs.
The performance in April, however, was much better than the 3.9 per cent growth rate witnessed during March, the last month of the previous fiscal, according the Index of Industrial Production (IIP) data released on Thursday.
“We expected the IIP to be weaker as the economy is clearly slowing down. But compared to the last 3 per cent industrial growth, the 7 per cent figure gives us some reassurance that though the economic growth will slowdown but it will not be as severe as it seemed,” S&P chief economist Subir Gokarn told PTI.
The stock markets seemed charged up after the IIP data was released with the benchmark Sensex, which was down by over 400 points in morning trade, recovered to end the day higher by over 60 points at 15,250.
Marketmen said 7 per cent growth better is than expected and it has boosted investors confidence. Attributing the reason for slowdown to high interest rates and increasing input costs, Crisil principal economist D K Joshi said the average industrial growth during 2008-09 is likely to be around 7 per cent.
Tags: growth, india, industrial