NEW DELHI: The economy may have performed worse than previously estimated for the fiscal year 2012-13. The annual survey of industries released for 2012-13 shows industry expanded at a decade low of 2.8% in FY13.

The data for annual survey of industries is used to update GDP numbers that are first calculated less accurate index of industrial production (IIP). The economic growth as initially estimated at decade low 4.5% in FY13 may be revised downwards after the latest ASI result in incorporated.
The net value added, which is simply total output minus the total input and depreciation, at 2.8% was way lower than 18.7% in the previous fiscal, data released by the Central Statistics Office showed on Monday.

Industry, previously estimated to have expanded at 5.7%, actually grew only around 3.8%, back of the envelope calculations suggest.

The high interest rates to curtail inflation hit investments and as Gross fixed capital formation, a proxy for investment, which grew by a mere 3.6% as against a robust 21.2% in the previous year, indicating that decisions related to investments in plant and machinery were put on hold.

While it comes with a lag of two years, ASI is regarded as providing more reliable data compared with the index of industrial production (IIP), as it’s based on the audited numbers of companies.

ASI and IIP data are not strictly comparable as industrial production reports data of a fixed set of factories which can report on a monthly basis, generally the big companies, whereas it is the smaller companies which report higher growth.

CSO is also in the process of compiling a similar data for the services sector through annual survey of services. The ASI data also showed that the number of factories grew by just 2% in 2012-13 compared to 2.7% in the previous fiscal.

ASI covers units registered under the Factories Act with 10 or more workers on any day of the previous year, where manufacturing is carried out using a power source of some kind and 20 and more workers in case where power is not used.