Prime Minister's economic advisory panel chief C Rangarajan has described the dip in factory output in September as "disappointing" and said industry may grow by just 6 per cent in the current fiscal, as against the earlier projection of 7 per cent.
"IIP for September is bad, but I do see a pick-up by the end of March. We had originally expected overall IIP at 7 per cent for the fiscal, but now it could be 6 per cent," Rangarajan, the chairman of the Prime Minister's Economic Advisory Council (PMEAC), said on Friday.
The index of industrial production (IIP) slipped to a two-year low of 1.9 per cent during September, mainly on account of poor performance of the manufacturing and mining sectors.
"The IIP numbers are disappointing. It is well below our expectation," he said, adding, "... To some extent, the decline is contributed by negative growth in the mining sector."
Mining output declined by 5.6 per cent in September this year, as against a growth of 4.3 per cent in the same month last year. During the first half of 2011-12, mining output dipped by 1 per cent, as against a growth of 7.2 per cent a year ago.
IIP growth during the April-September period moderated to 5 per cent from 8.2 per cent in the corresponding period last fiscal.
The government, Rangarajan said, "should ensure that the fall in coal production is corrected and also investment in infrastructure, especially, roads, rail and power."