Industrial activity expanded by 4.86% in April, driven in large part due by a surge in the manufacturing and mining sectors, official data released on Tuesday showed.
The growth in the Index of Industrial Production (IIP) in April followed March’s 4.58% reading. The mining and quarrying sector saw growth quicken to 5.06%, from 3.05% in March, while the manufacturing sector’s growth accelerated to 5.2%, from 4.67% in the previous month.
“It is the manufacturing growth that shows promise and if it is backed by some investment growth, particularly from the private sector, then this could be sustainable,” D.K. Srivastava, Chief Policy Advisor at EY India, said. “Capital goods growth, which could be seen as an indirect indicator of private sector investment, grew 13%. If this picks up, then the growth in the IIP could be more sustainable.”
Base effect
“The current reading is stronger” due to a favourable base effect, Anis Chakravarty, Lead Economist and Partner at Deloitte India, wrote in a note.
While the infrastructure/construction sector saw growth slowing to 7.51%, from 8.92% in March, the consumer goods category saw a more drastic slowdown: growth eased to 5.75%, from March’s 8.86%.