The Index of Industrial Production (IIP) rose to 2.7 per cent in January this year, with all three tracked sectors of mining, electricity and manufacturing registering positive growth.
In contrast, the IIP had contracted by 1.6 per cent in January 2016. It stood at 0.1 per cent in December last year.
“The cumulative growth for the period April and January 2016-17 over the corresponding period of the previous year stands at 0.6 per cent,” said an official release on Friday.
The IIP, which is considered a bellwether of factory output, grew by a more robust 2.7 per cent in the same period a year ago.
While mining sector grew by 5.3 per cent in January, electricity production increased by 3.9 per cent and manufacturing output rose by 2.3 per cent.
In sync with GDP data The data, released by the Central Statistics Office, seem to back up the second advanced estimates for national accounts that maintained its GDP forecast of 7.1 per cent for 2016-17 brushing off the impact of demonetisation of high value currency.
But in terms of industries, the IIP data show that just nine out of the 22 industry groups in the manufacturing sector registered positive growth.
The industrial group of electrical machinery and apparatus showed the highest positive growth of 42.4 per cent followed by 21.8 per cent in radio, TV and communication equipment and apparatus’ and 12.4 per cent in basic metals.
In use-based classification of industries, capital goods pointed to some revival in investment and grew by 10.7 per cent in January this year, as against a contraction of 21.6 per cent a year ago.
Basic goods grew by 5.1 per cent in January compared with 1.9 per cent in last January. However, intermediate goods production dipped by 2.3 per cent as against a growth of 2.8 per cent in January 2016.
Consumer goods dipped by 1 per cent in January this year, which was sharper than the 0.1 per cent decline last January.
Though non-durables grew by 2.9 per cent in January 2017, it was at a lower pace than the 5.6 per cent growth a year ago. Production of durable goods declined 3.2 per cent in January.
Noting that the sharp turnaround in capital goods was led by a 282.8 per cent increase in production of rubber insulated cables in January 2017, Aditi Nayar, Principal Economist, ICRA, said, “The resumption of growth in consumer durables output signals some normalisation of production schedules... We are relatively optimistic regarding the sustainability of the improvement in the performance of consumer durables.”
Industry has been hoping for a reduction in interest rates to help boost demand.
“The manufacturing growth, though positive in January, remains fragile and a cause for concern.
“The sector may see a revival in the coming months as a result of measures taken in budget and other areas,” said industry chamber FICCI.
Citing inflation concerns, the RBI had kept rates unchanged in its last policy review. The Monetary Policy Committee will now meet on April 5 and 6.