SME Times News Bureau | 12 Sep, 2019
Factory output for the month of July expanded by 4.3 percent
compared to 1.17 percent in June, whereas the country's August retail inflation
remained largely subdued with a marginal rise.
Factory output growth accelerated in July by 4.3 per cent, but it remained
lower than the 6.5 per cent achieved during the corresponding month of the
The 'quick estimates' of the Index of Industrial Production (IIP) for July
showed that manufacturing sector output rate rose 4.2 per cent in July from a
year-on-year rise of 7 per cent.
On YoY basis, mining production grew 4.9 per cent from a rise of 3.4 per cent
and the sub-index of electricity generation was 4.8 per cent higher from 6.6
Among the six use-based classification groups, the output of primary goods, which
has the highest weightage of 34.04, grew 3.5 per cent. The output of
intermediate goods, which has the second highest weightage, zoomed 13.9 per
While consumer non-durables output rose 8.3 per cent, consumer durables
declined 2.7 per cent.
Output of infrastructure or construction goods increased 2.1 per cent, but
capital goods' production receded 7.1 per cent.
The retail inflation in August showed a marginal rise to 3.21 per cent from
3.15 per cent in July. Nonetheless, the Consumer Price Index (CPI) in August
was lower than the corresponding month of the last year when retail inflation
stood at 3.69 per cent.
According to the data, the Consumer Food Price Index (CFPI) widened to 2.99 per
cent in August from an expansion of 2.36 per cent in July 2019 and 0.29 per
cent in August 2018.
Product-wise, prices of pulses, vegetables, eggs, meat and fish pushed the
retail food inflation higher on a year-on-year (YoY) basis. In contrast,
decline in the prices of sugar capped the overall food inflation.
The sub-category of food and beverages recorded a 2.96 per cent rise in last
month over August 2018. Among the non-food categories, the fuel and light
segment's inflation decreased by 1.70 per cent in August 2019.
On IIP, Devendra Kumar Pant, Chief Economist, India Ratings and Research, said:
"July 2019 IIP growth increased to two-month high of 4.3 per cent. Unlike
June 2019, all three sectors -- mining, manufacturing and electricity --
contributed to IIP growth.
"However, it will be too early to term this as recovery and one has to
wait for some more time and completion of the forthcoming festive season to
judge whether the industrial recovery is there for real."
Aditi Nayar, Principal Economist, ICRA, said: "While the late surge in
monsoon rains has narrowed the YoY gap in kharif sowing to a mild 0.6 per cent
as on September 6, 2019, the flooding in certain areas has led to a continued
rise in the prices of vegetables such as onions.
"This, in conjunction with an unfavourable base effect, is likely to
contribute to a hardening of food inflation in the ongoing month."
Madhavi Arora, Economist, Edelweiss Securities, said: "The current
growth-inflation mix has been favourable for counter-cyclical monetary
stance... We see scope for more (monetary policy) easing."