IIP hits 5- month high in July

■ Pickup in manufacturing ahead of festive season cited as reason for jump

India’s industrial output in June accelerated fastest in five months to 7 per cent led by pickup in manufacturing ahead of the festive season.

Manufacturing, which contributes 78 per cent of industrial output, grew 6.9 per cent in June compared with a 2.8 per cent rise in May, according to data released by the Central Statistics Office ( CSO) on Friday.

Power generation segment saw a rise of 8.5 per cent during the month as compared to 2.1 per cent growth a year ago. The mining sector output recorded an impressive growth of 6.6 per cent in June as against 0.1 per cent in June 2017.

The capital goods grew by 9.6 per cent in June ( against a contraction of 6 per cent in the same month last year) and consumer durables expanded by 13 .11 per cent ( against contraction of 3.5 per cent in June 2017).

Industrial growth measured in terms of the Index of Industrial Production ( IIP) was revised upwards for May at 3.9 per cent from previous estimate of 3.2 per cent estimated earlier. The cumulative growth for the period April- June 2018 stands at 5.2 per cent over the corresponding period of the previous year. “Excellent numbers of IIP growth for June. IIP rises by 7 per cent. Capital goods growth 9.6 per cent. First quarter IIP growth stands at 5.2 per cent with manufacturing also recording same growth. 19 out of 23 industry groups recorded positive growth with computer and electronics growth at 44 per cent,” tweeted Subhash Chandra Garg, secretary, department of economic affairs.

“IIP has been on a seesaw — a 4.8 per cent pickup in April, a 3.9 per cent dip in May and now a 7 per cent jump for June. The pick- up was fairly broad- based pick- up across categories but was led by manufacturing and electricity. On average, first quarter this fiscal with 5.2 per cent growth was far better than last year’s Q1 at 1.9 per cent,” said Crisil’s Dharmakirti Joshi.

He said consumerlinked sectors seemed to have performed better — there was a sharp pick- up in consumer durables and also to some extent in non- consumer durables and primary goods.

Mr Joshi said that going forward, some improvement in rural demand backed by normal monsoon, a pick- up in exports and positive spillover of pay commission revision ( for central and state government employees) on overall consumption demand will crank up i n d u s t r i a l growth.