15 percent Industrial growth likely in March

New Delhi: Economists today expected high industrial growth to continue and pegged the factory output to expand in the range of 15 -15.5 percent in March, data for which will be released tomorrow.

If industrial growth, as measured by the Index of Industrial Production (IIP), indeed grows by 15 per cent in March, factory output expansion will stand at 10.54 percent during the entire 2009-10 against just 2.4 percent in the previous fiscal.

"I expect IIP at 15 percent (in March). The growth drivers would be manufacturing, capital goods and consumer durables," Crisil principal economist D K Joshi told PTI.

Axis Bank economist Saugata Bhattacharya put the numbers at 15.1 percent.

"Automobile sector is performing good and consumer durables will be relatively high," he said.

Research division of HDFC Bank expects industrial growth to be 15.5 percent in March.

The growth will be driven by the core sector and manufacturing, it said. It expected manufacturing to grow by 17 percent in March.

The division further said auto production numbers are fairly good and consumer durables will also drive growth.

"Double digit IIP numbers to continue till May and see some moderations thereafter," it added.

On Monday, Commerce and Industry Minister Anand Sharma had also said, "The broadbased (industrial) growth will be sustained. There is no reason why it will not, because we have moved very firmly into the positive growth territory."

It can be recalled that the country's factory output expanded in double-digits for the sixth month in a row in February, growing by 15.1 percent.

Already, the core sector, which constitutes around one-fourth of total industrial production, expanded by over 7 percent in March. Automobile industry, important part of consumer durables industry, recorded a healthy 26.41 percent growth in sales in 2009-10.

If the industrial production expands by around 15 percent in March, it would help the overall economy clock 7.2 percent growth during 2009-10, as estimated by the government.

The year was marred by a weak monsoon, which badly impacted farm output, besides poor exports growth due to the demand slump in advanced economies after the financial crisis.

The stimulus packages and revival of domestic demand, however, helped industry post an improved performance, enabling the economy to recover faster than most other countries from the impact of global financial crisis.