Factory output logs 5-year record in Oct
Dec 11, 2015, DHNS:
Accelerating at its fastest pace in five years, India’s Index of Industrial Production (IIP) climbed up 9.8 per cent in October backed by a better manufacturing and capital goods output but the government cautioned about a careful interpretation of numbers which could be due to enhanced production ahead of Diwali last month.
The October industrial production growth was also due to a favourable base effect of last year but a sustained growth in manufacturing for the past as many months, which pointed toward a gradual recovery in this sector which is at the heart of the “Make in India” programme.
Manufacturing, which weighs more than 75 per cent in the index of industrial production, grew 10.6 per cent, electricity 9 per cent, and mining 4.7 per cent in October.
Consumer durables, a proxy for households’ permanent income, grew a whopping 42.2 per cent and capital goods output expanded 16.1 per cent.
Industrial production had contracted 2.7 per cent in October last year. Last month, the industrial output had grown only 3.6 per cent.
It was manufacturing sector that had propelled the second quarter (July-September) overall economic growth to 7.4 per cent, the data for which came last month. Analysts were sanguine about a similar expansion in the third quarter (October-December) economic growth numbers after a sustained performance in manufacturing sector.
“The latest IIP number is encouraging but we have to careful in interpreting it due to Diwali impact,” government’s Chief Economic Advisor Arvind Subramanian said.
India Inc said they were looking forward to a strong industrial recovery after most of the sectors showing a good output growth.
“Though manufacturing registered a high growth in October, but the low base in major sectors like capital goods and consumer durables has contributed significantly to this high growth. Nonetheless, the outlook for growth remains positive and can be strengthened in coming months if pace of reforms continues,” industry body Ficci said.
The October industrial production growth was also due to a favourable base effect of last year but a sustained growth in manufacturing for the past as many months, which pointed toward a gradual recovery in this sector which is at the heart of the “Make in India” programme.
Manufacturing, which weighs more than 75 per cent in the index of industrial production, grew 10.6 per cent, electricity 9 per cent, and mining 4.7 per cent in October.
Consumer durables, a proxy for households’ permanent income, grew a whopping 42.2 per cent and capital goods output expanded 16.1 per cent.
Industrial production had contracted 2.7 per cent in October last year. Last month, the industrial output had grown only 3.6 per cent.
It was manufacturing sector that had propelled the second quarter (July-September) overall economic growth to 7.4 per cent, the data for which came last month. Analysts were sanguine about a similar expansion in the third quarter (October-December) economic growth numbers after a sustained performance in manufacturing sector.
“The latest IIP number is encouraging but we have to careful in interpreting it due to Diwali impact,” government’s Chief Economic Advisor Arvind Subramanian said.
India Inc said they were looking forward to a strong industrial recovery after most of the sectors showing a good output growth.
“Though manufacturing registered a high growth in October, but the low base in major sectors like capital goods and consumer durables has contributed significantly to this high growth. Nonetheless, the outlook for growth remains positive and can be strengthened in coming months if pace of reforms continues,” industry body Ficci said.
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