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HindustanTimes Fri,19 Sep 2014

Rebound hopes loom as Aug IIP rises 2.7%

HT Correspondent, Hindustan Times  New Delhi, October 12, 2012
First Published: 11:28 IST(12/10/2012) | Last Updated: 21:00 IST(12/10/2012)

Hopes of economic recovery have sprung anew with India's factory output growing 2.7% in August, up from a contraction of 0.2% in July. With the busy season kicking in, analysts said these could well be little green shoots of recovery to push growth across the economy.

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"Rebound in consumer goods production growth to 5.0% from 0.5% in July was the main reason for the upside surprise," said Sonal Varma of broking and research firm Nomura.

This was led by higher production of both consumer durable and non-durables goods. Capital goods production, a measure of investment demand, however, continued to contract at 1.7%, though at a slower pace than July's 4.5% contraction, factory output data given by the index of industrial production (IIP) released on Friday showed.

Basic goods output, mainly comprising the infrastructure sector, rose at a faster pace of 2.8% against 1% in July.

"IIP numbers do indicate some turnaround in manufacturing. I expect that in the coming months the growth rate will further pick up, and, for the whole year, we can see manufacturing growth at 3-4%," said C Rangarajan, chairman of the Prime Minister's economic advisory council.


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