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  1. Industrial output grows at 4-month high of 3.8 pct in June

Industrial output grows at 4-month high of 3.8 pct in June

The IIP growth for May has been revised downwards to 2.5 per cent from the earlier estimate of 2.7 per cent.

By: | New Delhi | Updated: August 12, 2015 7:01 PM
index of industrial production (IIP) growth in india

India logged Index of Industrial Production (IIP) growth rate of 3.8 per cent in June against 4.3 per cent a year ago. (Reuters)

Industrial production expanded at a 4-month high rate of 3.8 per cent in June due to improvement in manufacturing activity.

Measured in terms of the Index of Industrial Production (IIP), industrial production had grown 4.3 per cent in June last year, as per the data released by Central Statistics Office (CSO) today.

The IIP growth for May has been revised downwards to 2.5 per cent from the earlier estimate of 2.7 per cent. It had grown at a rate of 3.35 per cent in April, and 2.5 per cent in March. The factory output growth was recorded at 4.9 per cent in February.

For the first quarter (April-June) of the current fiscal, the industrial production is at 3.2 per cent, as compared to 4.5 per cent growth in the year-ago period.

The manufacturing sector which constitutes over 75 per cent of the index, grew at 4.6 per cent in June compared to 2.9 per cent in the same month last year.

During April-June period, the sector grew by 3.6 per cent compared to 3.9 per cent in the year-ago quarter.

However, the output of capital goods, a barometer of investment, contracted by 3.6 per cent compared to 23.3 per cent growth in the same month last year.

For the April-June period, the capital goods production is up at 1.5 per cent, compared to 13.7 per cent growth in the corresponding period a year ago.

In terms of industries, 16 out of 22 groups in the manufacturing sector have shown positive growth in June, as compared to the same month of last fiscal.

The mining sector output contracted by 0.3 per cent in June compared a growth of 4.8 per cent in the same month last fiscal.

In the April-June period it has grown at 0.7 per cent, compared to 2.9 per cent in same period last fiscal.

Power generation growth too slowed to 1.3 per cent in June compared to 15.7 per cent in the same month a year ago.

During April-June, it grew at 2.3 per cent compared to 11.3 per cent in the three month period a year ago.

Overall consumer goods output grew by 6.6 per cent in June compared to a contraction of 8.8 per cent in the month a year ago. During April-June the consumer goods output grew by 2.4 per cent compared to a decline in production by 3.2 per cent.

The consumer durables goods output grew at 16 per cent in June compared to a contraction of 23.3 per cent in the month a year ago. In April-June the segment grew by 3.7 per cent compared to a contraction of 9.5 per cent in the period last year.

The consumer non-durable goods grew by 1.3 per cent in June compared to 1.9 per cent growth in the same month a year ago. During April-June, the output of these goods grew by 1.6 per cent compared to 1.3 per cent a year ago.

The basic goods output grew by 5.1 per cent in June, compared to 10.2 per cent a year ago, whereas the basic goods output grew by 0.8 per cent compared to 2.6 per cent in the same month last year.

Commentary

Dr Devendra Kumar Pant, Chief Economist, India Ratings & Research
IIP growth was led by manufacturing. Mining and electricity performed poorly in June. Consumer durable grew by 16% due to base effect (June 2014 it contracted by 23.25%). Capital goods output contracted after seven months. This points towed as a weak investment conditions.

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