India’s factory output grew by the 4.7% in May— the fastest in 19 months — rekindling hopes of an industrial rebound buoyed by a robust manufacturing sector, latest data released on Friday showed.
Factory output had contracted 2.5% a year ago. It grew 3.4% in April this year.
Capital goods output, a broad gauge to measure investment activity, grew by 4.5% in May, compared to a contraction of 3.7% a year ago, in what could be signs that companies are adding new capacities.
Factory output growth in May is the fastest since October 2012, when it grew 8.4%.
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Manufacturing, which constitutes over 75% of the index of industrial production (IIP), grew 4.8% in May, compared to decline in output by 3.2% a year ago.
“While it is reassuring to see some pick up in the growth of manufacturing in May but it needs to be seen in the context of the negative base.
The encouraging sign is the braod based growth as sixteen out of twenty two sectors have shown positive growth in manufacturing,” said Sidharth Birla, president, Ficci.
“The rise in industrial production provides a glimmer of hope that the economy could be bottoming out and recovery could be on the anvil,” said Chandrajit Banerjee, director-general, CII.
Finance minister Arun Jaitley, in his maiden budget on Thursday, has announced a raft of measures including capital support and tax breaks for small industries amid hopes that these would breathe life into the waning industrial sector and spin jobs.