Perspective on the IIP Data by Ms. Rajani Sinha, Chief Economist, CareEdge Ratings
Below the Perspective on the IIP Data by Ms. Rajani Sinha, Chief Economist, CareEdge Ratings
“Growth in India’s industrial production came at 4% in August, compared with an upwardly revised 4.3% in July. Improvement in mining and electricity sectors supported the overall IIP growth, however, the upside was capped by a moderation in the manufacturing sector growth.
On the investment front, infrastructure/construction goods continued to register a healthy growth, rising by 10.6%. Public capex continues to drive the investment momentum, while private capex remains sluggish amid persistent global uncertainties.
On the demand side, weakening performance was seen in the consumer goods output. Growth in consumer durables slowed to 3.5% in August Vs 7.3% in July while output of consumer non-durables contracted sharply by 6.3%. Consumption trends will remain a key monitorable, with GST reforms expected to provide a much-needed fillip to the demand scenario ahead of the festive season. Additionally, income tax reductions, lower food inflation, and RBI rate cuts provide a supportive backdrop for consumption. In the midst of a challenging external environment, a revival in domestic demand aided by these factors can help spur private capex and support the overall IIP growth going forward.”.
Above views are of the author and not of the website kindly read disclaimer
