India's industrial output grows signals recovery

New Delhi - India's industrial output grew 1.4 per cent in April against a decline of 0.75 per cent in March according to government data released Friday indicating, analysts said, early signs of economic recovery. Data from the Central Statistical Organization showed growth in the index of industrial production after two successive months of decline, spurred largely by a 7.1-per-cent rise in power generation. Manufacturing output, which has a weightage of nearly 80 per cent in the index, continued to register only sluggish growth, expanding by 0.7 per cent in April, against a growth of 6.7 per cent in the same month in 2008. However, 11 out of 17 industry groups showed growth during April, led by a 31.1-per-cent growth for wood and related products, 12.6 per cent for wool, silk and man-made textiles and 10.2 per cent for non-metallic mineral products. The government also revised its data for industrial production in March from an earlier contraction of 2.3 per cent to a fall of just 0.75 per cent. 'In coming months, industrial production is likely to continue to show signs of improvement,' Nikhilesh Bhattacharya, associate economist with Moody's economy.com, was quoted as saying by IANS news agency. He said the government's focus on infrastructure projects, monetary policy of the central bank and rebound in commodity prices would help stimulate production. Analysts feel the government's fiscal and monetary measures to spur the slowing economy were beginning to yield results. The promise of stability and economic liberalization measures riding on the re-election of a Congress Party-led United Progressive Alliance had also helped restore confidence. India's economy slowed down to 6.7 per cent in the 2007-2008 fiscal year compared to over 9 per cent the previous three years. India's financial year runs from April to March. Earlier this week, Prime Minister Manmohan Singh said the Indian economy was capable of growing by 8 to 9 per cent despite the global slowdown. 'Since our savings rate is as high as 35 per cent ... If all work together, we can achieve a growth rate of 8 to 9 per cent, even if the world economy does not improve,' he said while winding up a debate in Parliament.