New Delhi: India’s industrial production rose to two month high of 4.1 per cent in April driven by manufacturing. However, retail inflation too moved up in May to 5.01 per cent against 4.87 per cent in April mainly due to increase in fuel prices. Manufacturing, which constitutes over 75 per cent of the index, grew at higher rate of 5.1 per cent in April as against 3 per cent in the same month last year.
The production of capital goods, a barometer of demand, grew at a slower pace of 11.1 per cent in April as against 13.4 per cent in the same month last year. In April this year, mining sector too grew at a slower rate. The growth was 0.6 per cent as against 1.7 per cent in April last year. On the other hand, electricity production contracted by 0.5 per cent, while it had expanded by 11.9 per cent in the same month last year.
“Recent months’ data suggests that both consumer and investment related sectors are grinding up, albeit only gradually as indicated by the uptick in consumer and capital goods IIP sub-indices. However, the looming risk of a second consecutive weak monsoon might mean that the uptick in consumption would be slow,” said rating agency Crisil.
As far as inflation is concerned, it was pushed up by increase in fuel prices. “A positive indicator was that the food prices remained unimpacted by the untimely rains earlier in the year,” said Richa Gupta, senior director, Deloitte India.
