Industrial production rose 3.6 per cent in October, mainly on the back of better performance of manufacturing and electricity generation sectors, official data showed on Friday. According to the Index of Industrial Production (IIP) data, manufacturing and electricity generation sectors registered a growth of 3.5 per cent and 11.2 per cent, respectively. The mining sector clocked a contraction of 1.5 per cent in October. IIP had contracted by 6.6 per cent in October 2019.
“This is a second consecutive month that India’s industrial production has turned positive. The October IIP has surged to 3.6 per cent compared to 0.2 per cent in September. The easing of lockdown restrictions and increase in demand on the back of festive season has given rise to industrial output. RBI policymakers are already indicating that things can only get better from here. So, going ahead the pickup in demand and an eventual positive IIP figure will put India’s GDP in a better position,” said Rahul Gupta, Head of Research — currency, Emkay Global Financial Services.
Nish Bhatt, founder and CEO, Millwood Kane International, an investment consulting firm, agreed.
“The green shoots of recovery are visible; this is the second straight month that the industrial production data has shown positive growth. The October IIP growth is higher than most estimates. The positive growth in manufacturing, electricity, infra, consumer durables, and non-durables components indicates strong economic activity on the back of festive season demand,” he said.
“High stimulus, government spending, low rates, and easy liquidity along with positive IIP and GDP growth have ensured a quick recovery post the pandemic-led chaos. The strong recovery is expected to be durable and hopefully, we will see pre-COVID level growth in a few quarters.”