Manufacturing, capital, consumer goods push IIP growth to 7.5%, retail inflation falls to 4.4%

High on the strong growth seen in the manufacturing sector, India's industrial production registered 7.5 per cent growth in January, the data released by the Central Statistics Office stated on Monday. In January, the index expanded by 4 percentage points from 7.1 per cent in December. The industrial growth had grown 8.8 per cent, registering a 25-month-high, in November.

The IIP growth in January this year was mainly on account of an uptick in the manufacturing sector, which constitutes of 77.63 per cent of the index. The manufacturing sector grew 8.7 per cent in January, and 10.7 per cent and 8.4 per cent in November and December, respectively.

Capital goods, a barometer of investments, showed a sharp increase in output by 14.6 per cent in January 2018 against a decline of 0.6 per cent year ago. Consumer non-durable goods, which are mainly fast moving consumer goods, too showed an increase of 10.5 per cent as against a growth of 9.6 per cent. Consumer durable goods recorded a growth rate of 8 per cent in January 2018 against a contraction of 2 per cent a year ago. However, the mining sector saw a flat growth of 0.1 per cent compared to 8.6 per cent a year ago.

As per the use-based classification, the growth rates in January 2018 over January 2017 are 5.8 per cent in primary goods, 4.9 per cent in intermediate goods, and 6.8 per cent in Infrastructure/ Construction Goods. In terms of industries, 16 out of 23 industry groups in the manufacturing sector showed positive growth during January, 2018.

Experts suggest the consistent growth in the industrial production could boost the overall economic growth in the fourth quarter. The industrial production, which was 3.5 per cent in the same month last year, has seen a consistent growth in the past one year.

The overall recovery in the industrial growth will also bring a sigh of relief for the NDA government. The BJP-led government struggled to bring the economy back on track after two big structural reforms - demonetisation and the GST rollout - were carried by the Modi government. Though a positive industrial growth and recent PMI numbers indicate an economic recovery, a major chunk of the economy, which is the informal sector that employs significant population of the country, is still coping with the effects of the structural reforms. The PMI indicates the country's purchasing power; it took a five-year high in December to 54.7 and settled at 52.4 in January.

Retail inflation falls to 4-month low 

The retail inflation, however, fell to four-month low of 4.44 per cent in the month of February as compared to 5.07 per cent in January. The reduction in retail inflation has been seen due to cheaper food articles and lower cost for fuel. In February 2017, however, it was 3.65 per cent. Inflation in vegetables was 17.57 per cent in February against 26.97 per cent in January. Inflation for the fuel and light category was at 6.80 per cent in February against 7.73 per cent in January.

With PTI inputs