Powered by better-than-expected ‘manufacturing’ performance, index of industrial production (IIP) grew 4.1 per cent in April, higher than 3.7 per cent growth recorded in same month last year.
Manufacturing output--which had weightage of 75 per cent in IIP—grew 5.1 per cent in April, higher than the 3 per cent growth seen in same month last year.
While IIP performance in April was a positive surprise, the retail inflation for May—which came in at 5.1 per cent—was in line with expectations.
The latest IIP performance is a pointer to some revival in industrial activity given that factory output had recorded growth of 2.5 per cent (now revised upwards from 2.1 per cent earlier) in March this year.
For the entire 2014-15, IIP growth stood at 2.8 per cent, higher than the 0.1 per cent contraction seen in the previous year.
Manufacturing performance for April was bolstered by continued uptrend in capital goods output, which grew for the sixth straight month at 11.1 per cent. Consumer goods output expanded 3.1 per cent in April.
Meanwhile, consumer price index (CPI)-based inflation for May 2015 at 5.01 per cent was higher than 4.87 per cent in April. It was significantly lower than the 8.33 per cent in May last year.
The heartening aspect is that food price inflation came in lower at 4.8 per cent as against 5.11 per cent in previous month. Food price inflation in May last year was 8.89 per cent.
The real worry for policymakers on the food inflation front should be ‘pulses’ which has seen a year-on-year inflation of 16.62 per cent in May 2015. Spices saw an inflation of 8.82 per cent and milk price inflation was 7.43 per cent..
Reacting to the April IIP performance, Assocham President Rana Kapoor said that the numbers seem to be “healthy and encouraging” and seem to provide stem to the underlying growth momentum.
FICCI President Jyotsna Suri said that the manufacturing growth seems to be gaining momentum now as is evident from the healthy growth of key sectors like capital goods and also from the fact that growth is more diversified.
“We are hopeful that this momentum will continue since there is a commitment at the highest level”, she said .
srivats.kr@thehindu.co.in