- IIP signals economy on revival path, Budget to help: India Inc
Driven by improved performance of the manufacturing sector, industrial output growth soared to 19-month high of 4.7 per cent in May raising hopes of a sustained recovery.
The factory output number has remained in positive territory for second month in a row mainly due to a better show by manufacturing, mining and power sectors and higher output of capital goods.
The output, as measured by the Index of Industrial Production (IIP), had contracted by 2.5 per cent in May last year.
IIP data for April remained unchanged at 3.4 per cent after revision of the provisional estimates released last month, according to the information released by the Central Statistics Office (CSO).
The IIP's previous high was recorded in October 2012 at 8.4 per cent.
"The rise in industrial production provides a glimmer of hope that the economy could be bottoming out and recovery could be on the anvil," CII Director General Chandrajit Banerjee said.
During the April-May period of the current fiscal, IIP has recorded a growth of 4 per cent, as against the contraction of 0.5 per cent in the first two months of the 2013-14 fiscal.
Manufacturing, which constitutes over 75 per cent of the index, grew 4.8 per cent in May, compared to decline in output by 3.2 per cent a year ago. For April-May, the sector has recorded 3.7 per cent growth, compared to the contraction of 0.7 per cent in the year-ago period.
Production of capital goods, a barometer of demand, grew by 4.5 per cent in May in sharp contrast to 3.7 per cent contraction in same month of last fiscal.
Overall, 16 of the 22 industry groups in manufacturing showed positive growth in May.
According to the IIP data, in April-May, the capital goods output has grown by 9.3 per cent, compared to the contraction of 2.1 per cent in the first two months of 2013-14.
The mining sector grew by 2.7 per cent in May as against a dip of 5.9 per a year ago. For April-May, the segment grew by 2.6 per cent, compared to decline in production by 4.7 per cent in the year-ago period.
Power generation increased by 6.3 per cent in May as compared to 6.2 per cent growth in the same month of 2013. In April-May, power output grew by 9 per cent compared to a growth of