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Industrial output rose to 8-month high of 7.1% in April

Industrial output rose to an eight-month high of 7.1 per cent in April on the back of improved performance by the power and mining sectors, as per government data released on Friday.

The manufacturing sector recorded growth of 6.3% in the first month of the current financial year, data on Index of Industrial Production (IIP) released by the National Statistical Office (NSO) showed.

The previous high for IIP growth was 13% in August 2021.

However, the NSO added that growth rates over the corresponding period of the previous year are to be interpreted considering the unusual circumstances on account of the COVID-19 pandemic since March 2020.

The power and mining sectors grew 11.8% and 7.8%, respectively.

As per use-based classification, the capital goods segment recorded a growth of 14.7%, while consumer durables output expanded 8.5%.

The NSO further said output for primary goods, intermediate goods, infrastructure/ construction goods, and consumer non-durables sectors expanded 10.1%, 7.6%, 3.8% and 0.3%, 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% in April 2022, although it trailed our expectation (9.2%), led by a weaker-than-anticipated performance of mining.”

The weak showing of capital goods output relative to the pre-COVID level confirmed the view that the uptick in capacity utilisation in the fourth quarter of 2021-22 would 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 had grown on a month-on-month as well as year-on-year basis.

“Though 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 other key data to watch for would be the Consumer Price Index (CPI) to be released next week, Mr. Bhatt added.

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