IIP beats note ban to rise 2.7% in January

Capital goods help; consumer goods hold back

New Delhi, March 10: Industrial production bounced back in January expanding by 2.7 per cent year-on-year mainly due to better performance by the capital goods segment, a barometer of investment activities.

The factory output, measured in terms of IIP, had contracted by 0.1 per cent in December on account of cash crunch following demonetisation of high value currency notes. The industry output had expanded by 5.53 per cent in November.

The capital goods segment grew by 10.7 per cent in January against a contraction of 21.6 per cent in the same month of last financial year.

The basic goods category expanded by 5.3 per cent against 1.9 per cent growth in January 2016.

On the other hand, the intermediate goods category contracted by 2.3 per cent. Despite quickening of the remonetisation process, the consumers goods segment contracted by 1 per cent in January. It comes over a 0.1 per cent decline in January 2016.

In the consumer goods segment, durable items expanded by 2.9 per cent, but non-durable contracted by 3.2 per cent.

IIP as a whole had contracted by 1.6 per cent in January 2016.

On cumulative basis, IIP during April-January 2016-17 showed an expansion of 0.6 per cent, which was lower than 2.7 per cent reported in the year-ago period.

The indices of industrial production for mining, manufacturing and electricity sectors posted growth rates of 5.3 per

cent, 2.3 per cent and 3.9 per cent respectively in January 2017.

The cumulative growth in these three sectors during April-January 2016-17 was 1.4 per cent, (-)0.2 per cent and 5.0 per cent, respectively.

In total, nine out of the 22 groups in the manufacturing sector have shown positive growth during January 2017 on annual basis.

The industry group 'electrical machinery and apparatus'’ has shown the highest growth of 42.4 per cent followed by 21.8 per cent in ‘radio, TV and communication equipment and apparatus’ and 12.4 percent in 'basic metals'.

Meanwhile, the group 'office, accounting and computing machinery' showed the highest negative growth of 16 per cent.