Manufacturing, capital & consumer goods push IIP growth to 7.5 pc

Mar 13, 2018, 04:13
Manufacturing, capital & consumer goods push IIP growth to 7.5 pc

January saw annual consumer inflation of 5.1%, off the December figure of 5.2%, which was the highest rate in 17 months.

"The IIP data also points towards signs of economic recovery as the negative effect of the disruptive shocks of past year appear to be on the wane".

Inflation rate for "food and beverages" segment moderated to 3.38 per cent in February from 4.58 per cent in the previous month, while the "fuel and light" inflation rate moderated to 6.80 per cent from 7.73 per cent in January, CSO data showed.

India's retail inflation eased for the second straight month in February but remained above the 4 percent medium-term target of the Reserve Bank of India (RBI), strengthening views it will hold rates steady at its April meeting rather than raise them.

A lower inflation is considered to be an ideal situation for central bank to slash prices to aid industrial and commercial activity. "Domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in global crude oil prices".

In December, the index of industrial production (IIP) grew 7.1%, while consumer price index (CPI)-based inflation had slowed to 5.1% in January.

Manufacturing sector, which accounts for more than three-fourths of the entire index soared 8.7 percent in January as compared with 8.5 percent in December, led by an improved production of consumer durables and continued double-digit growth of consumer non-durables as well as capital goods.

The consumer food price index (CFPI) stood at 3.26% during the month, lower compared to 4.70% of January 2018, but way higher from 2.01% of year ago same month. It grew by 8.7% during the month as compared to 2.5% in January 2017, showing signs of recovery in the economy.

Capital goods, a barometer of investments, showed a sharp increase in output by 14.6 per cent in January 2018 against a decline of 0.6 per cent year ago.

Consumer non-durable goods, which are mainly fast moving consumer goods, too showed an increase of 10.5% as against a growth of 9.6%. However, mining grew by a mere 0.1 per cent in the month.

Chandrajit Banerjee, director general, CII said: "The visible improvement in industrial output, which rose to 7.5 per cent at the onset of the New Year as against 3.5 per cent last year, augurs well for the return of broad based recovery in industrial performance during the year".