NEW DELHI: The day after the global credit agency Moody’s upgraded India’s rating outlook, the country’s factory output, as measured by the Index of Industrial Production (IIP), grew at 9-month high of 5 per cent in February this year on the back of strong show in manufacturing and mining sectors. The growth was 2.6 per cent in January.
This will give a much-needed boost to the government ahead of the Prime Minister’s visit to France, Germany and Canada when it is looking to reboot the economy and take it to a higher growth trajectory.
While the mining output grew at 2.5 per cent against 2.3 per cent on year-on-year basis, the consumer goods output grew at 5.2 per cent versus -5.2 per cent y-o-y. The manufacturing output, which constitutes over 75 per cent to the index, grew by 5.2 per cent in February 2015 compared to a contraction of 3.9 per cent in the same month a year ago. The factory output had declined by 2 per cent in February 2014.
Soumya Kanti Ghosh, Chief Economic Advisor, State Bank of India expects things to improve in near term as sentiments are positive. Ghosh said, “We are closer to the greenshoots now. If one looks at the numbers from November onwards it has been positive. February has been positive, March should also be better because March is generally a seasonal month where it does better.”
“We will be closely watching the April number. So, the April number if it comes in say around 2 or 3 per cent then it will confirm that possibly we are out of woods,” he added.
The indices for January 2015 have undergone the first revision and those for November 2014 have undergone the final revision in the light of the updated data received from the source agencies.
During the April-February period, capital goods output grew by 6 per cent as against a dip of 2.6 per cent. Fifteen out of the 22 industry groups in the manufacturing sector have shown positive growth during February year-on-year.