Industrial Production Paints A Rosy Picture
The Index of Industrial Production (IIP) numbers for the months of April has come in at 17.6 per cent higher as compared to the level in the month of April 2008. The revised annual growth for the period April-March 2009-10 stands at 10.4 per cent over the corresponding period of the previous year.
IIP numbers for the month of April’10 have been way ahead of expectations. Reuter poll saw a median forecast of 13.5 per cent as against actual number of 17.6 per cent released recently. Base effect continues to play its part and is expected to start tapering off from June’10. Growth was led mainly by capital goods and consumer durables which grew by 72.8 per cent and 37 per cent respectively. PMI data for the month of May’10 has also been positive with index at 59 as against 57.2 in orders and output. This warns of a further rise in prices led by demand side inflation which will make case of policy tightening. RBI will have to walk the tight rope in terms of controlling inflation amid global tremors.
The Indices of Industrial Production for the mining, manufacturing and electricity sectors for the month of April 2010 stand at 197.0, 341.5 and 246.9 respectively, with the corresponding growth rates of 11.4 per cent, 19.4 per cent, 6.0 per cent as compared to April 2009.
In terms of industries, as many as fifteen out of seventeen industry groups have shown positive growth during the month of April 2010 as compared to the corresponding month of the previous yaer.
The industry group Machinery and Equipment other than transport equipment have shown the highest growth of 55.6 per cent followed by 51.9 per cent in metal products and parts, except machinery and equipments and 41.4 per cent in other manufacturing industries. On the other hand, the industry group wood and wood products: furniture and fixtures have shown a negative growth of 16.6 per cent followed by 2.7 per cent in beverages, tobacco and related products.
As per Use-based classification, the sectoral growth rates in April 2010 over April 2009 are 8.8 per cent in basic goods, 72.8 per cent in capital goods and 10.8 per cent in intermediate goods. The consumer durables and consumer non-durables have recorded growth of 37.0 per cent and 6.6 per cent respectively, with the overall growth in consumer goods being 14.5 per cent.
By Abhijeet Dubey
The writer is with Globe Capital Market Ltd.