Wednesday, 09 Oct, 2024
By: Anshul Vipat
Image source: IANS
The festive season has proved wonders for the market. It needs to be seen whether this momentum would sustain beyond the festive cheer
India's industrial production growth rose to a five-month high of 7.1 percent in November on the back of better showing by manufacturing. The numbers gives hope for the industrial sector which saw a contraction in recent months. India's industrial output had slipped to an 18-month low contracting 4.2 percent in October, mainly due to a decline in output of the manufacturing and mining sectors. The rise was aided by base effects as November 2021 had clocked just 1 percent growth, but also marked a 6 percent uptick in output levels over October 22, which incidentally recorded the lowest level for the Index of Industrial Production (IIP) since November 2021.
Index of Industrial Production (IIP) maps the change in the volume of production in Indian industries usually of a month, as against the reference period. It is a composite indicator of the general level of industrial activity in the economy. According to the data, the November growth was aided by all major sectors. Mining output growth accelerated from 2.5% in October to 9.7% in November. Electricity generation rose 12.7% in November, from just 1.2% year-on-year growth in October 2022, but total generation was 1.5% lower than the previous month.
As per the use-based classification, the capital goods segment recorded an impressive growth of 20.7 per cent in November against a decline of 2.6 per cent in the corresponding month of the last fiscal. Consumer durables and consumer non-durables recorded growth rates of 5.1 per cent and 8.9 per cent respectively. Both these segments reported contraction in November 2021. Infrastructure/construction goods too posted healthy growth of 12.8 per cent as against 3.1 per cent in the same month of 2021.
The data also showed that the output of primary goods and intermediate goods improved by 4.7 per cent and 3 per cent, respectively in November 2022. The increase in consumer durables and non-durables signals high consumer consumption which may have been due to lower levels of inflation.
Industrial production was hit hard during the pandemic period. It had shrank 57.3 percent in April 2020 due to a decline in economic activities. Thereafter, it remained below 4.4% throughout the year and touched the lowest level of 1 percent in November as well as December 2021.
The festive season has proved wonders for the market. It needs to be seen whether this momentum would sustain beyond the festive cheer.
