Industrial output growth rose to an eight-month high of 7.1 per cent in April on the back of improved performance by power and mining sectors, as per government data released on Friday.
Manufacturing sector recorded a growth of 6.3 per cent in the first month of the current financial year, as per the data on Index of Industrial Production (IIP) released by the National Statistical Office (NSO).
The previous high for IIP growth was 13 per cent in August 2021.
However, the NSO added that growth rates over corresponding period of the previous year are to be interpreted considering the unusual circumstances on account of the COVID-19 pandemic since March 2020.
As per the data, power and mining sectors grew by 11.8 per cent and 7.8 per cent, respectively.
As per use-based classification, the capital goods segment recorded a growth of 14.7 per cent, while the consumer durables sector expanded by 8.5 per cent.
The NSO further said the primary goods, intermediate goods, infrastructure/ construction goods, and consumer non-durables sectors expanded by 10.1 per cent, 7.6 per cent, 3.8 per cent, and 0.3 per cent, respectively.
Aditi Nayar, Chief Economist, ICRA, said: “The low base of the second wave of COVID-19 bumped up the IIP growth to an 8-month high of 7.1 per cent in April 2022, although it trailed our expectation (9.2 per cent), led by a weaker than anticipated performance of mining.” The weak showing of capital goods output relative to the pre-COVID level confirms the view that the uptick in capacity utilisation in fourth quarter of 2021-22 will not trigger a rapid private sector capacity expansion in light of the uncertainties generated by geopolitical developments, she added.
Nish Bhatt, Founder and CEO, Millwood Kane International, said industrial output has grown on a month-on-month as well as year-on-year basis.
“Though the industrial growth has seen an uptick, it has been very erratic, it needs sustained growth over a long period of time for policymakers to take note of it,” he pointed out.
The next key data to watch for will be the Consumer Price Index (CPI) to be released next week, Bhatt added.