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IIP up 3.1% in Sep, experts say growth higher than expected
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IANS | 11 Nov, 2022
The Index of Industrial Production (IIP) rose by 3.1 per cent to 133.5
in September, according to official data released by the Ministry of
Statistics and Programme Implementation (MoSPI) on Friday.
The
growth in the industrial index was aided by all major sectors like
mining, which rose 4.6 per cent to 99.5 in September, manufacturing
sector, which grew 1.8 per cent to 134.3, and the electricity sector,
which soared 11.6 per cent to 187.4, according to the official data.
Expressing
satisfaction at the 3.1 per cent growth in industrial production in
September, experts said the December monetary policy action by the
central bank on the credit flow and interest rates are key factors.
Experts also expressed concern on the poor performance of the consumer durables and non-durables segment.
On
Friday, the Ministry of Statistics and Programme Implementation
published the quick estimates of Index of Industrial Production (IIP)
for September 2022.
As per the data, the IIP grew by 3.1 per cent as compared to 4.4 per cent logged during September 2021.
CARE
Ratings' Chief Economist, Rajani Sinha, said: "The IIP growth for
September has been higher than expectations. The strong growth recorded
in capital goods and infrastructure sector is encouraging and is
hopefully a precursor to pick up in the capex cycle."
However,
improvement in domestic consumption demand will be critical for
sustained recovery in India's growth momentum, she said.
"Hence,
poor performance of IIP consumer durables and non-durables is worrisome.
Going forward, as inflation moderates, we are likely to see a pickup in
consumption demand," Sihna added.
Knight Frank India's Director,
Research, Vivek Rathi, said: "A revival of 3.1 per cent in Industrial
production growth is a strong indication of improving output and demand
condition in the economy. The boost to industrial production in
September is coming from a significant growth in capital and
infrastructure output."
However, he said that the revival in manufacturing output is moderate and is yet to a show significant recovery.
"Going
forward, strong manufacturing sector performance as witnessed in
expansionary manufacturing PMI (purchasing managers index) and improving
capacity utilisation provides more impetus to the manufacturing output
which would boost industrial production," Rathi added.
According
to him, the cues from post-Diwali season sales, sustenance of
manufactured products and RBI action in December on credit flow and
interest rates will hold the key for industrial production.
"The
September IIP growth at 3.1 per cent is better than most estimates. The
biggest component manufacturing and mining growth at 1.8 per cent and
4.6 per cent respectively is a positive. It indicates the traction in
the industrial segment," Nish Bhatt, Founder & CEO, of Millwood Kane
International said.
Bhatt said the one concern is the
contraction in consumer durables and non-consumer durables, despite
September being a festive season month when people spend.
"The
industrial growth, and CPI inflation data due next week couple d with
the Q2 GDP data will be a data set that will be keenly watched by the
RBI which meets next month to decide on the monetary policy," Bhatt
added.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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