India’s industrial production growth rose to 5.2 per cent in January from 4.7 per cent in the previous month, helped by a healthy jump in power generation and mining output, as per the government data released on Friday.
Industrial output, measured in terms of the Index of Industrial Production (IIP), has posted a cumulative growth of 5.4 per cent in the April-January period of the current financial year. This is sharply lower than 13.7 per cent expansion posted in the corresponding period of 2021-22.
The January figure of 5.2 per cent growth comes on a low base. Industrial output had increased by 2 per cent in January 2022.
Electricity production increased by a healthy 12.7 per cent in January. The cumulative increase in electricity production for the first 10 months of the current financial year stands at 10.1 per cent, year-on-year basis.
Mining output rose by 8.8 per cent in January 2023 taking the cumulative increase for the first 10 months of the fiscal to 5.8 per cent.
Manufacturing, which has around 78 per cent weight in the IIP, posted a sluggish growth of 3.7 per cent in January. Cumulative growth in manufacturing output for April-January period of the current financial year declined to 4.8 per cent as compared to 14.4 per cent posted in the corresponding period of 2021-22.
“The IIP growth in India has demonstrated an average of 6.05 per cen between 1994 and 2022 and from this perspective there is still quite a headroom for it to grow further from here on, especially in manufacturing which increased only by 3.7 per cent in the month of January,” said Mohit Ralhan, Chief Executive Officer, TIW Capital.
The on-ground business activities appear to be stabilising with higher growth in capital goods and infrastructure goods of 11.0 per cent and 8.1 per cent, respectively.
A revival of the capital investment cycle and high spending on infrastructure are likely to keep IIP growth above 5 per cent, keeping Indian economic growth on track, Ralhan added.
As per use-based classification, the capital goods segment posted a growth of 11 per cent in January 2023, sharply higher than 1.8 per cent expansion recorded in the corresponding month of last year.
Output of consumer non-durable goods increased by 6.2 per cent in January as compared to 3.1 per cent growth recorded in the same month last year.
However, consumer durables output slumped by 7.5 per cent in January 2023. It had posted a contraction of 4.4 per cent in January 2022.