New Delhi: In what will bring some relief to the fragile economy, industrial production rebounded in April to 13-months high of 3.4 per cent and retail inflation slipped to three months low of 8.28 per cent in May.
“Coinciding with the FIFA World Cup opening, a pleasant turnaround in the industrial growth in April and the retail inflation inching down in May provided a perfect field for the new government of
Prime Minister Narendra Modi to kick off a smart rebound in the Indian economy,” said Yes Bank managing director and CEO and Assocham president, Rana Kapoor.
The rebound in industrial production comes after contraction for previous two months in a row.
The manufacturing sector grew by 2.6 per cent and electricity by 11.9 per cent in April.
The capital goods sector, which indicate investment in the country, grew by 15.7 per cent.
“With the pace of implementation of investment activity yet to display a broad-based pickup, it is unclear whether the double-digit growth of the volatile capital goods index would persist in the ongoing quarter. Although sentiments have improved considerably, the extent and pace of structural reforms initiated in the months ahead would critically influence the commencement of a durable investment-led revival in economic growth,” said Aditi Nayar, senior economist, ICRA. As far as retail inflation was concerned, food inflation fell slightly to 9.56 per cent in May against 9.66 per cent in April. Vegetable prices rose by 15.27 per cent as against 17.5 per cent in April. Prices of cereals and its products came cheaper with rate of price rise at 8.81 per cent as against 9.67 per cent a month ago.
