IIP growth a morale booster for economy

IIP growth a morale booster for economy

Cheering the spurt in industrial output which grew by 9.8 percent in October, India Inc termed it as a booster for the economy, hoping that the strong growth trend would continue on the back of reforms. “The industrial growth on the back of an impressive double digit expansion in manufacturing should no doubt be considered a morale booster for the economy,” Assocham President Sunil Kanoria said.

“We look forward to strong industrial growth recovery, with the sector registering double digit growth in the coming times,” PHD Chamber Secretary General Saurabh Sanyal said.

 In a big jump, the October industrial production grew 9.8 percent on an annual basis, riding on the back of a robust growth in consumer products and capital goods during the festive season. IIP growth for September has been revised upwards to 3.84 percent while it was -2.7 percent in October 2014. The manufacturing sector, a key indicator of economic activity, grew 10.6 percent year-on-year in October. Electricity generation expanded 9 percent and the mining sector was up 4.7 percent. “Though manufacturing registered a high growth in October, the low base in major sectors like capital goods and consumer durables has contributed significantly to this high growth. “Nonetheless, the outlook for growth remains positive and can be strengthened in coming months if pace of reforms continues,” Ficci Secretary General A Didar Singh said. However, Singh pointed out that the global slowdown continues to impact trade and affect India’s exports adversely thus impacting manufacturing growth especially when the domestic demand is also sluggish. Hailing the October industrial production growth, engineering exporters’ body EEPC India said a similar feat is desperately required in the country’s export performance. India’s exports remained in the negative territory for the 11th month in a row by registering a dip of 17.53 percent in October to $21.35 billion due to a demand slowdown, while trade deficit showed an improvement. The growth in the consumer durables segment was a whopping 42.2 percent in October over the same month last year. While, the consumer goods category saw a growth of 18.4 percent and consumer non-durables rose by 4.7 percent. The data further showed that capital goods segment grew 16.1 percent while the expansion in basic goods came in at 4.1 percent.