Published 19:06 IST, September 12th 2019
IIP at 4.3% for July, high food prices hike August CPI to 3.2%
Driven by costlier food items, retail inflation inched up to 10-month high of 3.21% in August but remained within RBI's comfort level, IIP growth slowed to 4.3%
According to official data released on Thursday, the industrial production of India is at 4.3% in July 2019, while showing acceleration in growth from four-month low of 1.2% in June and 4.6% in May this year. However, the industrial production growth for June 2019 has been revised downwards to 1.2% from 2.0% as reported provisionally. Factory output, as measured in terms of Index of Industrial Production (IIP), had expanded 6.5% in July 2018.
Change in manufacturing sector
While a slowdown was witnessed in the manufacturing sector, which grew to 4.2% in July while showing improvement in growth from 0.2% increase in June 2019. The mining sector production growth also improved to 4.9% in July 2019. On the other hand, the power generation growth has moderated to four-month low of 4.8% in July 2019, compared to 6.6% a year ago earlier..
According to data released by the the Ministry of Statistics and Programme Implementation, industrial output grew at 3.3% in April-July period this fiscal, down from 5.4% growth in the same period a year ago. It was recorded at 1.2% in June and 4.6% in May this year.
The data also showed that the industrial output grew at 3.3% in the April-July period this fiscal, down from 5.4% growth in the same period a year ago. Capital goods segment, which is a barometer of investment, saw a contraction of 7.1% in July compared to 2.3% rise a year ago.
As per use-based classification, the output of capital goods continued to decline for seventh straight month at 7.1% in July 2019 while the growth rates in primary goods stands at 3.5%, intermediate goods at 13.9% and infrastructure/construction goods at 2.1%. Moreover, while consumer non-durables have recorded growth of 8.3%, the consumer durables are at (-) 2.7%.
In terms of industries, 13 out of the 23 groups in the manufacturing sector have shown positive growth during July as compared to the same month a year ago. Besides that, the industry group 'manufacture of food products' has also shown the highest positive growth of 23.4% followed by 17.3% in 'manufacture of basic metals' and 15% in 'manufacture of wearing apparel'.
On the other hand, the industry group 'manufacture of paper and paper products' has shown the highest negative growth of (-)15.4% followed by (-)13.3% in 'manufacture of motor vehicles, trailers and semi-trailers' at (-)10.9% in 'printing and reproduction of recorded media'.
Rise in retail inflation
On another note, retail inflation has, in August, recorded a marginal increase to 3.21% from 3.15% in July, mainly due to costlier food items, showed the official data released on Thursday.
The rate of price rise in the food basket was recorded 2.99% in August, up from 2.36% in the previous month, as per the Consumer Price Index (CPI) data released by the Ministry of Statistics & Programme Implementation. Meanwhile, the CPI-based inflation is at 3.69% in August 2018.
The RBI, which mainly factors in CPI for arriving at its bi-monthly monetary policy, has been mandated by the government to ensure that inflation remains at 4%, with deviation of 2% on either side.
Updated 22:06 IST, September 12th 2019