Industrial output shrinks 0.6%, dashes economy recovery hopes
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Power generation grew by 5.2 per cent in December last year, as against 9.1 per cent in same month of 2011. The electricity generation in the April-December period this
fiscal stood at 4.6 per cent, as against 9.4 per cent in a year-ago period.
In terms of industries, 12 out of 22 groups in the manufacturing sector have shown negative growth in December, 2012 as compared to the same month in 2011.
India economy recovery hopes dashed as output unexpectedly shrinks
(Reuters): India's industrial production unexpectedly shrank for a second straight month in December, weighed down by weak investment and consumer demand, casting doubt on Finance Minister P. Chidambaram's view that Asia's-third largest economy is showing signs of recovery.
The index of industrial production (IIP) fell 0.6 percent annually in December, data released by the Central Statistics Office showed on Tuesday.
A Reuters poll of 24 economists had expected growth of 1.1 percent, after output shrank 0.8 percent in November.
Manufacturing output, which accounts for the bulk of industrial production and contributes about 15 percent to overall gross domestic product (GDP), fell 0.7 percent in December from a year earlier.
"What is clear is that any meaningful industrial recovery is eluding us. Demand destruction is far more well entrenched than we thought," said Sujan Hajra, chief economist at brokerage firm Anand Rathi in Mumbai, who said he now sees GDP growth next year of 5-6 percent.
Preliminary data from India's statistics office last week predicted growth of 5 percent for the fiscal year ending in March 2013.
That was worse than anticipated and triggered an angry response from Chidambaram.
Chidambaram said the Central Statistical Organisation had used "dated data" and argued that GDP growth was following an upward trend in a sign of revival. He reiterated his view that 5.5 percent growth was possible.