Pranab Mukherjee says govt, RBI to work on reviving IIP growth

Attributing the "disappointing" industrial growth performance to tight monetary policy and global factors, Finance Minister Pranab Mukherjee on Thursday said the government and the Reaserve Bank of India (RBI) will take steps to revive growth.

"These (IIP) figures will have bearing on monetary policy announcement scheduled for next week. The government along with RBI will take required steps to revive activity in the economy," Mukherjee told reporters in the national capital.

Mukherjee was commenting on the Index of Industrial Production (IIP) data which revealed that industrial growth rate slipped to 4.1 per cent in February from 6.7 per cent a year ago. During April-February 2011-12, IIP slipped to 3.5 per cent, against 8.1 per cent a year ago.

He further said that "uncertainty in the global economy coupled with monetary tightening in the past have impacted investment recovery".

The RBI, which had raised interest rates 13 times since March 2010 to contain spiraling inflation, is yet to reverse its decision though the price situation has improved considerably. It kept the rates unchanged in its policy reviews in December 2011 and February 2012.

RBI is scheduled to announce the credit policy on April 17 amid demand for cut in short-term lending (repo) rates.

On the revision of IIP figure for January 2012 from 6.8 per cent to 1.14 per cent, Mukherjee said: "This is disappointing ... the revival in manufacturing in the last quarter of 2011-12 has not materialised as anticipated."