Demonetisation fails to pull down IIP growth further, industrial production bounces back to 2.7% in January

New Delhi: Growth in industrial production rose to 2.7 percent in January due to good performance of mining and manufacturing sectors coupled with sharp increase in output of capital goods, as per data released by Central Statistics Office (CSO).

Factory output measured in terms of Index of Industrial Production (IIP) was (-)1.6 percent in January last year,

The index had contracted by 0.4 percent in December last year with consumer durables taking the worst hit, plummeting by over 10 percent due to cash crunch post demonetisation. The December decline had reflected deterioration in the manufacturing sector on account of cash crunch following the scrapping of the Rs 500/1000 notes on November 8, 2016.

 

The cumulative growth for the period April-January period of the current financial year over the corresponding period of the previous year stood at 0.6 percent, as per the data released by Central Statistics Office Friday.

The manufacturing sector, which accounts for over 75 percent of the index, grew by 2.3 percent in January against a contraction of of 2.9 percent in same month a year ago.

Mining sector output too rose by 5.3 percent in January compared to a growth of 1.5 percent a year ago.

Capital goods segment, which is a barometer of investment, jumped by 10.7 percent in January as against a contraction of  21.6 percent year ago.

Output of consumer durables segment - TVs, refrigerators and washing machines - grew by 2.9 percent during the month under review compared to a growth of 5.6 percent a year ago.