Factory output rises nearly 10 per cent in October
Arvind remains cautious; sees the effect of Diwali.
New Delhi: Industrial production jumped to a five-year high at 9.8 per cent in October as consumers went on a shopping spree during the festival season. According to analysts, the data will bring a cheer to the investors who are getting anxious over delay in the passage of the Goods and Services Tax (GST) Bill in the Parliament due to the logjam between the government and the opposition parties.
“The latest IIP is very good. It’s a high number, good number and encouraging number. But one has to be a little bit careful in interpreting this number — especially this month as there is a Diwali effect,” said chief economic advisor Arvind Subramanian. He expressed the hope it would become a trend in the coming months.
The previous high in the index of industrial production was in October 2010 at 11.36 per cent. Consumer durables grew by 42 per cent in October over a low base in the last year. It had contracted by 35 per cent in October 2014. Gems and Jewellery grew by whopping 372 per cent, mobile phones and accessories by 61.5 per cent, colour TV sets by 34.5 per cent, scooter and mopeds by 24.5 per cent and passenger cars by 21.4 per cent.
Consumer non-durables grew by 4.7 per cent taking the overall consumer goods growth to 18.4 per cent. The manufacturing sector grew by 10.6 per cent in October against a contraction of 5.6 per cent in the same month last year.
“Though the manufacturing sector registered a high growth in October, the low base in major sectors like capital goods and consumer durables too has contributed significantly to this high growth. Nonetheless, the outlook for the growth remains positive,” said Dr A. Didar Singh, secretary general, Ficci. The data showed capital goods segment grew 16.1 per cent while the expansion in basic goods came in at 4.1 per cent.
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