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Industrial production grows by over 3.5% in Oct
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SME Times News Bureau | 11 Dec, 2020
India's industrial activity accelerated in October with a rise of over
3.5 per cent in factory output on a year-on-year basis, official data
showed on Thursday.
As per the Quick Estimates of Index of
Industrial Production (IIP), the factory output grew by 3.6 per cent in
October 2020 from 0.49 per cent in September and (-) 6.6 per cent during
the corresponding month of the previous year.
"For the month of
October 2020, the Quick Estimates of Index of Industrial Production
(IIP) with base 2011-12 stands at 128.5," the Ministry of Statistics and
Programme Implementation said.
"The Indices of Industrial
Production for the Mining, Manufacturing and Electricity sectors for the
month of October 2020 stand at 98, 130.7 and 162.2, respectively."
The
IIP had been in the negative territory from April to August FY21 due to
the Covid-19 pandemic and the subsequent lockdown to curb its spread.
Among
major segments, manufacturing production grew by 3.5 per cent from (-)
5.7 per cent reported for the corresponding month of last year.
Similarly, electricity generation grew by 11.2 per cent from (-) 12.2 per cent during October 2019.
However, mining output de-grew by (-) 1.5 per cent on a YoY basis.
Furthermore,
the data on a YoY basis showed that manufacturing of primary goods
de-grew by (-) 3.3 per cent, whereas capital goods production rose by
3.3 per cent, and intermediate goods inched higher by 0.8 per cent.
On
the other hand, the production of infrastructure or construction goods
grew by 7.8 per cent and consumer durables by 17.6 per cent.
The sub-segment of consumer non-durables showed a growth of 7.5 per cent.
"While
the IIP growth stood at an eight month-high, and displayed its best
performance since the pandemic struck, the pace of the improvement in
October 2020 was feebler than expected," said Aditi Nayar, Principal
Economist, ICRA.
"Coming on the base of a 6.6 per cent
contraction in October 2019, the 3.6 per cent growth in the IIP in
October 2020 is decidedly modest, and suggests that caution in the
interpretation of the strength of the economic recovery is still
warranted."
She pointed out that a variety of available
indicators such as output of coal, electricity, non-oil exports and GST
e-way bills have revealed that the pace of growth flagged in November
2020, on account of a combination of an unfavourable base effect, fewer
working days related to the shift in the festive calendar, as well as
some slack after the satiation of pent-up demand.
"Based on the available information, we anticipate a slide in the IIP growth in November 2020," Nayar said.
"Moreover, a slippage back into a mild contraction in November 2020, can not be ruled out at this point."
Sunil
Kumar Sinha, Principal Economist, India Ratings and Research, said: "No
doubt two consecutive months of positive IIP growth is a good sign for
the economy, India Ratings and Research (Ind-Ra) is only cautiously
optimistic and may wait for few more months to believe that economy is
firmly on a path of recovery since in the past IIP growth, more than
once, has collapsed after couple of months of good growth."
Emkay
Global's Lead Economist Madhavi Arora said: "Overall, the trend hints
at sequential improvement in demand in line with other high frequency
indicators but the data still is somewhat fogged by pent-up and festive
led demand."
"That said, 3QFY21 and 4QFY21 would see the V-shaped recovery continue."
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As on 13 Aug, 2022 |
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