Industrial Production Jumps to a Five-year High in October

India’s factory output rose sharply by 9.8 percent in October. (Photo: iStockphoto)

Surpassing expectations, India’s factory output rose sharply by 9.8 percent in October, due mainly to a robust 10.6 percent growth in the manufacturing industry, official data released by Central Statistics Office (CSO) on Friday showed.

The growth had decelerated to 3.6 percent in the month before and was placed at (-)2.7 percent in October of last fiscal year.

While the electricity output grew by 9 percent, that in mining was higher by 4.7 percent, according to the official numbers on the Index for Industrial Production which were released by the Ministry of Statistics and Programme Implementation.

Cumulatively, the factory output growth was 4.8 percent between April and October, as against 4 percent in the first six months of this fiscal. This was more than double the figure of 2.2 percent logged during the first seven months of the previous fiscal.

The latest IIP is very good. It’s a high number, good number and encouraging number. But one has to be a little careful in interpreting this number... especially this month as there is a Diwali effect

<b>Arvind Subramanian, Chief Economic Advisdor</b>

The previous high in the index of industrial production was in October 2010 at 11.36 percent.

The expansion in the consumer durables segment was a whopping 42.2 percent in October over the same month last year. While the consumer goods category paced up at 18.4 percent, consumer non-durables rose by 4.7 percent.

The data showed capital goods segment grew 16.1 percent while the expansion in basic goods came in at 4.1 percent.

On IIP data, industry chamber Assocham said:

“What is even more pleasing is a huge 16.1 percent growth in capital goods, reflecting revival in investment cycle and a robust expansion of 9 percent in electricity generation, which follows solid improvement in coal production.

Some important items showing a high positive growth in October on an annual basis include gems and jewellery (372.5 percent), sugar machinery (103.4 percent), and telephone instruments, including mobile phones and accessories (61.5 percent).

(With inputs from PTI and IANS.)