Let us pick two bits of information. First, Q1 real GDP growth estimates for 2006-07, which show GDP growth of 8.9 per cent on last year’s corresponding quarter. We will have Q2 estimates on November 30. The service sector has been chugging along, while agriculture and allied activities and mining and quarrying have been lagging behind. Electricity, gas and water supply have not done too well either. What has driven growth in Q1 is manufacturing, growing at 11.3 per cent.

Second, we have quick estimates of the index of industrial production (IIP) for September 2006. The October figures will be available in December. September 2006 on September 2005, IIP shows an increase of 11.4 per cent. And April to September 2006, IIP shows an increase of 10.9 per cent over a comparable period in 2005. Now let us get some pedantic stuff out of the way. Industry is not manufacturing. Other than manufacturing, industry includes mining and quarrying, electricity, gas and water supply and construction.

For instance, in IIP, manufacturing accounts for 79.36 per cent of the weight. Within the IIP growth of 11.4 per cent, it is manufacturing that has done well. September 2006 on September 2005, manufacturing grew at 12 per cent and for April to September 2006, manufacturing grew at 12.1 per cent. One can disaggregate this manufacturing growth further, in which case, one finds that everything except capital goods has been growing fast. And disaggregated differently, everything other than jute and vegetable fibres and “other manufacturing” (a residual category) has done well. The impressive growth is broad-based and hence the question, Are we witnessing a manufacturing revival?

... contd.