December 12, 2009 9:05 AM

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India’s industrial production expands by 10.3% in Oct; economy to boost further

A year since this century's worst financial crisis choked industrial activity, India's factory production expanded by 10.3 per cent in October fuelling hopes that it would power the economy ahead. GDP grew 7.9 per cent in the second quarter this fiscal, showing the country is was well on the road to recovery provided farm growth does not dip much in the coming quarters. For the first seven months of this fiscal, the Index of Industrial Production, which measures industrial growth, expanded by 7.1 per cent against 4.3 per cent a year ago.<br/><br/>Economists say strong industrial growth is due to base effect as well as genuine recovery. With industry well on the way to recovery, experts feel the RBI and the government can now focus on combating inflation.<br/><br/>Attributing the double digit industrial growth rate to stimulus packages, the Planning Commission has said the growth momentum would be maintained in the coming months. Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters in New Delhi that to get a growth rate well above 10 per cent is not just a base effect. He said there is an element growth that is taking place, which he hoped will be sustained. Pointing out that the government efforts are yielding results, Ahluwalia said, the stimulus is taking effect and the recovery process is, therefore, gaining ground.

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