Slowdown fears deepen as IIP growth contracts 5.1%

The optimism exuded by the government of 7.5 per cent economic growth this financial year on a better second half is ringing hollow, with industrial output contracting 5.1 per cent in October. The contraction, seen after more than two years, was led by a 25.5 per cent fall in the capital goods sector, despite the festive season. It may not be a repeat of what happened during the global financial crisis, when industrial production contracted for seven months in a row from December 2008. But, the euro zone crisis, the RBI’s tight monetary stance and the government’s policy inaction have subjected the economy to tough times. The manufacturing and mining sectors are among the worst affected.

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