The country’s industrial output grew by 17.6 per cent in April, rekindling the debate whether the Reserve Bank of India (RBI) would increase interest rates during its policy review next month, as focus shifts towards inflation-control.
The manufacturing sector that accounts for 80 per cent of the index of industrial production (IIP) grew 19.4 per cent in April, as against 0.4 per cent a year-ago, according to official data released on Friday.
Capital goods production grew by 72.8 per cent against a contraction of 5.9 per cent a year -ago, reflecting higher investment by corporations as they expand capacities to meet rising demand.
Consumer durables output continued to grow at a fast pace of 37 per cent, mirroring higher purchase of goods such as televisions and refrigerators.
Finance Minister Pranab Mukherjee exuded confidence about a sustained turnaround in the industrial sector.
“My appetite is infinite. I would have been happier, if it was 20 per cent," Mukherjee told reporters.
“Capital goods (growth) I think, we are having it for quite some time", Mukherjee said.
All eyes are now on the RBI that will meet on July 27 and is expected to increase policy rates as focus shifts towards cooling inflation.
While food inflation has been hovering around 17 per cent, prices of manufactured goods have shown a steady increase in recent months.