Industry logs double digit growth

New Delhi, Dec. 11: India’s factory output surged by 10.3 per cent in October indicating that industrial growth is on track.

However, the market was expecting a growth of 12 per cent in October so the Sensex went down after the data was released. The industry had grown by 0.1 per cent in the same month last year and by 9.6 per cent in September 2009.

“To get a growth rate well above 10 per cent is just not a base effect. There is an element of growth that is taking place which I hope will be sustained,” said Planning Commission deputy-chairman, Dr Montek Singh Ahluwalia. He gave credit to the stimulus packages announced by the government for the revival in the industrial growth.

Citi India, economist, Ms Rohini Malkani, said that the industrial production is expected to grow in the range of 9-11 per cent in the coming months due to the low base, coupled with signs of demand picking up. “Easy financial conditions, business and consumer confidence surveys, motor vehicle sales, cement and steel demand, and a host of other indicators suggest a continued improvement in economic activity,” said Goldman Sachs.

The data showed that the manufacturing sector grew by 11.1 per cent in October as against a negative growth of 0.6 per cent last year in the same month.

This is the third consecutive month that the manufacturing growth has been in double digits. Almost all sectors saw double-digit trends, with intermediate goods up 14.3 per cent, capital goods up 12.2 per cent and consumer goods up 11.8 per cent, led by a 21 per cent rise in durables.