India's industrial output increases by 3.4 % in April

India's industrial output increases by 3.4 % in April

India's industrial output increases by 3.4 % in April

India's industrial output growth rebounded to a 13-month high of 3.4 per cent in April, beating estimates and also snapping a two-month contracting trend, as investment activity showed signs of revival.

The industrial production (IIP) data for April showed a handsome growth on the back of a pick-up in manufacturing, electricity and capital goods sectors. Production of capital goods, a barometer of demand rose 15.7 per cent, manufacturing output increased 2.6 per cent and electricity generation rose 11.9 per cent, data released by the Central Statistics Office Thursday showed.

The Index of Industrial Production had contracted 0.5 per cent in March and risen by 1.5 per cent in the year-ago period. The manufacturing sector, which accounts for nearly three-fourths of the total weight of the IIP, also showed some signs of improvement.

Growth in the sector rose sharply to a nine-month high of 2.6 per cent in April.Growth in core infrastructure sectors such as electricity surged to a seven-month high of 11.9 per cent. Mining activity continued to remain tepid with a growth rate of 1.2 per cent compared with 0.3 per cent in previous month.

However, the output of consumer goods declined by 5.1 per cent in April compared to growth of 1.7 per cent a year ago. A contraction in consumer goods production is an indication of erosion in people’s purchasing power in the economy which is evident during high inflation and slow growth.

The growth in output of basic goods rose to a 26-month high of 6.8 per cent in April, while intermediate goods growth was at a four-month high of 4.4 per cent.

Encouraged by a significant growth in IIP, Ficci president Sidharth Birla said, "We look forward to  some big ticket measures by the Government in its forthcoming budget which could send strong signals to investors and restore their confidence in the economy".

“In order to ensure a full-fledged economic revival, it is necessary that the government demonstrates its commitment to fulfilling the reforms agenda,” said Chandrajit Banerjee, Director General, CII.