Factory output declined 1.8 per cent in June, driven down by a slump in manufacturing. Output of capital goods and non-durable goods dipped sharply.This performance pales against the robust 9.5 per cent growth the Index of Industrial Production (IIP) recorded in June last year. The situation is not all that comforting even from the standpoint of the first quarter.The Index declined 0.1 per cent in April-June against 6.9 per cent growth in the same quarter last year, according to official data released here on Thursday.
Expressing disappointment over the decline in IIP, Finance Minister P. Chidambaram said in a statement that the overall contraction was mainly due to the dip in the manufacturing sector (-3.2 per cent in June and -0.7 per cent in April-June).He pointed out that within the manufacturing sector, capital goods declined 27.9 per cent in June and consumer non-durables declined 1 per cent in the same month.Chidambaram said bottlenecks should be removed to facilitate investments in critical sectors. Production will revive if there are new investments in the demand creating industries, he said.