Hoping for a positive growth in country’s Gross Domestic Product (GDP) in the third quarter of this financial year, industrial production bounced to a five-year high at 9.8 per cent in October on an annual basis, due to a robust growth in consumer products and capital goods during the festive season.
However, it is notable that the growth in the consumer durables segment was a whopping 42.2 per cent in October over the same month last year. While the consumer goods category saw a growth of 18.4 per cent, consumer non-durables rose by 4.7 per cent.
The Index of Industrial Production (IIP) growth for September this year has been revised upwards at 3.84 per cent while it was -2.7 in October 2014. The manufacturing sector, a key indicator of economic activity, grew 10.6 per cent year-on-year in October. Electricity generation expanded 9 per cent and the mining sector was up by 4.7 per cent.
“The general index for October 2015 stands at 181.3, which is 9.8 per cent higher compared to the level in October 2014. The cumulative growth for April-October 2015-16 over the corresponding period of the previous year stands at 4.8 per cent,” said the Central Statistics Office (CSO) data released on Friday.
However, the industrial output has given a hope for the Government that the trend will continue to see a better economy in the future. “The latest IIP is very good. It’s a high number, good number and encouraging number. But one has to be a little bit careful in interpreting this number. Especially this month as there is a Diwali effect,” Chief Economic Adviser Arvind Subramanian told reporters on Friday and expressed hope it would become a trend.
With the CSO data, India Inc is also optimistic that the growth outlook will remain positive and can be strengthened in coming months if pace of reforms continues. “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” said A Didar Singh, Secretary General of industry body FICCI.
“The global slowdown continues to impact trade and affect India’s exports adversely thus impacting manufacturing growth especially when the domestic demand is also sluggish” added Singh.
As per the data, capital goods segment grew 16.1 per cent while the expansion in basic goods came in at 4.1 per cent. Some of the important items showing a high positive growth during October over the same month last year include gems and jewellery (372.5 per cent), sugar machinery (103.4 per cent), telephone instruments including mobile phones and accessories (61.5 per cent), antibiotics and its preparations (38.5 per cent), and passenger cars (21.4 per cent).
“In terms of industries, 17 out of the 22 industry groups in the manufacturing sector showed a positive growth in October 2015 compared with the same month last year. Industry group furniture-manufacturing has clocked the highest growth of 138.9 per cent, followed by 48.4 per cent in office, accounting and computing machinery and 47.5 per cent in radio, TV and communication equipment and apparatus,” the data said.
On the contrary, industry group publishing, printing and reproduction of recorded media has moved at the highest negative growth of (-) 10.2 per cent, followed by (-) 6.8 per cent in medical, precision and optical instruments, watches and clocks and (-) 2.9 per cent in coke, refined petroleum products and nuclear fuel.