Industry grows at 7.1% in July 2008

After the slow growth in the last two months, Indian industry has made a strong come back in July as it recorded a growth of 7.1% over the same period of last year. The industry grew at 3.8% in May and 5.4% in June.In April, industrial production grew at 7%. In the first four months of the current financial year, the industry has shown a growth rate of 5.7% against 9.7% in the same period last year.The latest figure will give the government some room to fight inflation, which is still hovering over 12%. To contain inflation, the Reserve Bank of India (RBI) had increased the interest rate, which affected the demand from public. But, now as the industry is showing a good growth, a senior economist said that RBI may resort to hike in the interest rate once more to bring down the inflation in single digit.Chief economist of rating agency Crisil D K Joshi said that though the current number is much inferior to what it was in the last couple of years, the recovery is a welcome sign. But, controlling the inflation will continue to be the most important responsibility of the Central bank. It might increase the statutory rates by quarter a percentage points once more to bring down the inflationary pressure.Interestingly, despite rise in the interest rate, the consumer durables have shown a sign of strong growth in July. Production of consumer durables went up by 11.2% in July 2008.